What is the procedure for Auntie Annes to change the Local Marketing Obligation?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
We may change the Local Marketing Obligation, provided that we must give you at least 60 days' written notice of the change.
Your Local Marketing Obligation will be in addition to amounts you must pay or spend under Section 3.2.B (Advertising Contribution) and for the Grand Opening Obligation under Section 10.1.C. (Grand Opening Advertising).
You will be responsible for determining the amount of advertising funds you spend for individual local market advertising, subject to the Local Marketing Obligation (if any) and our approval of your annual local marketing plan, if applicable.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the franchisor can change the Local Marketing Obligation with a minimum of 60 days' written notice to the franchisee. The Local Marketing Obligation is the minimum amount a franchisee must spend each calendar quarter on local market advertising, as specified in Schedule A of the Franchise Agreement.
This obligation is separate from other advertising fees, such as the Advertising Contribution and Grand Opening Advertising fees. The franchisee is responsible for determining how to spend their local advertising funds, provided they meet the Local Marketing Obligation, if any, and adhere to the franchisor's approval of their annual local marketing plan, if applicable.
The FDD specifies certain expenditures that do not count toward the Local Marketing Obligation, including salaries, donations, in-store fixtures, menus, yellow page advertising, signage, and incentive programs. Auntie Annes has the right to request documentation to verify compliance with the Local Marketing Obligation. Failure to meet the Local Marketing Obligation constitutes a material breach of the Franchise Agreement, potentially allowing Auntie Annes to spend the required amount on local advertising and require reimbursement from the franchisee.