Under what condition does Auntie Annes require the payment of additional contingent rent for SBRs?

According to Auntie Annes's 2024 Franchise Disclosure Document, certain leases for Store, Bakery, and Restaurant locations (SBRs) require the payment of additional contingent rent. This condition is triggered if the SBR's sales exceed the specific amounts that are outlined in the lease agreements.

For a prospective Auntie Annes franchisee, this means that the rent for their location could increase if their sales performance is strong. The exact sales threshold that triggers this additional rent, as well as the method for calculating the contingent rent, will be detailed in the specific lease agreement for the location. It's important to carefully review the lease agreement to understand these terms.

This type of lease arrangement, where rent is partially based on sales performance, is not uncommon in the retail and restaurant industries. It allows the landlord to share in the success of the business, while also potentially offering a lower base rent. However, it also means that the franchisee's rental costs could increase as their business grows. Franchisees should factor this potential increase into their financial projections and business planning.