Is Auntie Annes obligated to review the Site Agreement?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
- 2. Site Agreement. You must deliver a copy of the signed lease, sublease, or other rental agreement for the location (the "Lease") or purchase agreement for the location (the "Purchase Agreement" and, collectively with the Lease, the "Site Agreement") to us with all material terms specified therein. You will be solely responsible for negotiation of the terms of the Site Agreement and performance under the Site Agreement. We will have the right, but not the obligation, to review your Site Agreement prior to its execution to verify its compliance with our requirements. (Franchise Agreement, Section 5.4)
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 61–77)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, while franchisees are responsible for negotiating the terms of their Site Agreement, Auntie Annes has the right, but not the obligation, to review the Site Agreement to verify its compliance with their requirements. The Site Agreement refers to the lease, sublease, or other rental agreement (Lease) or purchase agreement (Purchase Agreement) for the location.
This means that prospective Auntie Annes franchisees must understand that the onus is on them to ensure the Site Agreement meets Auntie Annes's standards. While Auntie Annes may offer guidance, they are not legally bound to do so. Therefore, franchisees should carefully review all terms and conditions before signing any agreement.
This policy is fairly common in the franchise industry, where the franchisee typically bears the responsibility for securing and managing their location's lease or purchase agreement. However, the franchisor often retains the right to approve the site and review the agreement to protect their brand and ensure compliance with their standards. For Auntie Annes, this protects the brand by ensuring the location meets certain criteria, while the franchisee carries the responsibility of the lease terms.