Is Auntie Annes permitted to establish company-owned outlets that compete with franchisees?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
e basis. You will have no exclusive or protected rights in your site selection area.
If you operate a Concession Shop, you will be required to submit all locations from which you will operate the Concession Shop in advance for our written approval, which will each be considered to be an Accepted Location. In most cases, we will not approve the operation of a Concession Shop within two miles of a permanent Full Shop location.
No Exclusive Territory
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
**No Protected Territory for A
Source: Item 12 — TERRITORY (FDD pages 77–80)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, franchisees may face competition from other franchisees, outlets that Auntie Anne's owns, or from other distribution channels or competitive brands that Auntie Anne's controls. Auntie Anne's does not grant franchisees an exclusive territory, except for Co-Branded Shops in Streetside Locations.
Specifically, if a franchisee does not have an Area of Protection, Auntie Anne's and its affiliates can establish or license franchises, as well as company or affiliate-owned businesses, that offer similar products using the Auntie Anne's system and trademarks, even near the franchisee's location. This includes the right to sell approved products through alternative channels such as supermarkets, e-commerce, and ghost kitchens, regardless of whether the franchisee has an Area of Protection. Auntie Anne's also retains the right to advertise anywhere, including inside any Area of Protection.
For franchisees operating Co-Branded Shops in Streetside Locations, there are limited protected rights within an Area of Protection. However, Auntie Anne's can still operate single-branded shops or shops co-branded with different brands within or outside the Area of Protection. These reserved rights underscore that Auntie Anne's retains significant control over market development and distribution strategies, which may impact individual franchisee operations.
Prospective franchisees should be aware that Auntie Anne's and its affiliates can operate businesses that compete with franchised locations, and they may solicit and accept orders from customers near a franchisee's business. While Auntie Anne's does not anticipate conflicts between franchisees and its affiliates, it also has no obligation to resolve any perceived conflicts that may arise.