How often must an Auntie Annes franchisee make an Advertising Contribution?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Currently, you must make a monthly Advertising Contribution to the Ad Fund in the amount of 1.5% of Net Sales for Shops located in Other Locations and 3% of Net Sales for Shops located in Streetside
Locations. We may increase the Advertising Contribution by notice to franchisees. However, your required Advertising Contribution and Local Marketing Obligation will collectively not exceed 5% of your Net Sales. Your Advertising Contribution is in addition to your Local Marketing Obligation and your Grand Opening Obligation (as defined below).
We currently do not, and are not required to, maintain the Ad Fund, Advertising Contribution you paid, or income earned from contributions to the Ad Fund in a separate account from our other money. Our Shops will contribute to the Ad Fund in the same manner and in the same amounts as similarly-situated franchised Shops. Our other franchisees may not be required to contribute to the Ad Fund, may be required to contribute to the Ad Fund at a different rate than you, or may be required to contribute to a different advertising fund.
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, franchisees are required to make Advertising Contributions on a monthly basis. The amount of this contribution is dependent on the location of the shop. For Auntie Annes locations in "Other Locations", the contribution is 1.5% of Net Sales. For shops located in Streetside Locations, the contribution is 3% of Net Sales.
It is important to note that Auntie Annes has the right to increase the Advertising Contribution with notice to franchisees. However, the total of the Advertising Contribution and the Local Marketing Obligation will not exceed 5% of Net Sales. The Advertising Contribution is in addition to the Local Marketing Obligation and the Grand Opening Obligation.
These contributions are allocated to the Ad Fund, which Auntie Annes uses for advertising and promotion of the shops, Proprietary Marks, and the System. The document specifies that Auntie Annes is not required to maintain the Ad Fund in a separate account from their other money. Also, other franchisees may be required to contribute to the Ad Fund at a different rate.