When are payments due for the Auntie Annes Computer System expenditure?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| Low | High | Payment | Due | Be Made | | Initial Franchise Fee 1 | $71,000 | $71,000 | Lump sum | At signing of Franchise Agreement | Us | | Construction and | $322,000 | $503,000 | As incurred | As arranged | Contractors | | Build Out Costs 2 | | | | | |
| Type of Expenditure | Amount of | Expenditure | Method of | When Payments Are | To Whom Payment Will | |--------------------------------------------------
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 44–54)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, payments for the computer system, which ranges from $7,400 to $27,400, are due before opening. The method of payment is 'as incurred,' and payments are made to vendors.
This means that as the franchisee incurs costs related to the computer system, such as purchasing hardware or software, they will need to make payments to the vendors providing those items before the Auntie Annes store can open for business. The 'as incurred' payment method suggests that franchisees may need to budget and manage these expenses throughout the setup phase, rather than paying a single lump sum.
Prospective Auntie Annes franchisees should clarify with the franchisor which specific computer systems and software are required, which vendors are approved, and what payment schedules to expect. Understanding these details will help in accurately budgeting for the initial investment and managing cash flow during the pre-opening phase.