What restriction did Auntie Annes agree to remove from future franchise agreements as part of the Assurance of Discontinuance with the State of Washington?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
On July 12, 2018, to resolve objections raised by the Washington Attorney General and without admitting any liability, we voluntarily entered into an Assurance of Discontinuance ("AOD") with the State of Washington (No. 18-2-17231-4SEA), where we agreed to remove from future franchise agreements a provision which restricts a franchisee from soliciting and/or hiring our or our affiliates' employees or the employees of our other franchisees, which the Attorney General alleged violated Washington state and federal antitrust and unfair practices laws.
Similar provisions have historically been found in franchise agreements across all industries.
While we never enforced this provision against any franchisee, we agreed, as part of the AOD, not to enforce this provision in any existing franchise agreement and to notify its franchisees accordingly.
The State of Washington did not assess any fines or other monetary penalties against us or our affiliates.
We do not include such restrictive provisions in our agreements and are bound by the AOD to not enforce these clauses in any existing franchise agreements.
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, to resolve objections raised by the Washington Attorney General, Auntie Annes voluntarily entered into an Assurance of Discontinuance (AOD) with the State of Washington on July 12, 2018. As part of this agreement, Auntie Annes agreed to remove a provision from future franchise agreements that restricted franchisees from soliciting or hiring employees of Auntie Annes, its affiliates, or other Auntie Annes franchisees. The Attorney General had alleged that this provision violated Washington state and federal antitrust and unfair practices laws.
Although Auntie Annes never enforced this provision against any franchisee, they agreed as part of the AOD not to enforce it in any existing franchise agreement and to notify its franchisees accordingly. The State of Washington did not impose any fines or monetary penalties against Auntie Annes or its affiliates.
This AOD ensures that Auntie Annes franchisees have the freedom to hire qualified employees without facing contractual restrictions that could limit their ability to staff their locations effectively. This benefits franchisees by allowing them to compete for talent in the labor market and build a strong workforce. It also reflects a commitment by Auntie Annes to comply with antitrust and fair practices laws, fostering a more transparent and equitable relationship with its franchisees.