Upon termination of the Auntie Annes franchise agreement, what must a franchisee do regarding the Auntie Annes system, including marks and confusingly similar items?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
On expiration or termination of this Agreement for any reason, you must:
- A.
Immediately cease using the System, including the Marks and any confusingly similar names, marks, commercial symbols, systems, insignia, symbols, color schemes, trade dress, designs, procedures, domain names, and methods.
If you fail or refuse to make changes to the Franchised Business required to distinguish the Franchised Business from its former appearance, we have the right, in addition to all other remedies, to enter the Accepted Location and make the required changes on your behalf, and you must pay to us the entire costs we incur in making the changes, including interest from the date of demand, plus an administrative fee in an amount equal to 15% of the entire cost of the changes.
- B.
Immediately return to us: (i) all hard copies and electronic copies (capable of being returned) of the Confidential Information and Trade Secrets, including the Manuals, together with all copies of any of them; and (ii) all other manuals, records, files, instructions, correspondence and other materials relating to the operation of the Franchised Business ("Other Materials").
If you have on your computer systems, your e-mail accounts, or other digital storage systems or services copies of the Confidential Information, Trade Secrets, and/or Other Materials, you must immediately erase these copies.
You must provide us with a certification attesting to the fact that all copies of the Confidential Information, Trade Secrets, and Other Materials in your control or the control of your officers, directors, owners, employees, agents, and representatives have been returned or destroyed in accordance with this Section.
- C.
Within 5 days after expiration or termination, pay us and our affiliates the full amount you owe us and them.
- D.
Immediately stop identifying yourself in any way as our franchisee or former franchisee.
- E.
Immediately comply with the restrictive covenants in Section 15 (Confidential Information; Restrictive Covenants).
Source: Item 22 — CONTRACTS (FDD page 106)
What This Means (2024 FDD)
According to the 2024 Auntie Annes Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee has several obligations. The franchisee must immediately cease using the Auntie Annes system, which includes all trademarks, service marks, commercial symbols, color schemes, trade dress, designs, procedures, domain names, and methods that are part of the Auntie Annes brand or are confusingly similar to it. This means the franchisee cannot continue to operate a business that resembles or could be mistaken for an Auntie Anne's location. If the franchisee does not make the required changes to differentiate the business from its former appearance, Auntie Annes has the right to enter the location and make those changes, charging the franchisee for all associated costs plus a 15% administrative fee.
Additionally, the franchisee must return all hard and electronic copies of confidential information and trade secrets, including manuals and other materials related to the operation of the franchised business. This includes erasing any digital copies of this information from computer systems, email accounts, and other storage services. The franchisee must also provide a certification confirming that all copies of confidential information have been returned or destroyed.
The franchisee is also obligated to pay all outstanding amounts owed to Auntie Annes and its affiliates within five days of the termination or expiration date. Furthermore, the franchisee must immediately stop identifying themselves as a current or former Auntie Anne's franchisee and comply with all restrictive covenants related to confidential information and competitive activities as outlined in the franchise agreement. These measures ensure that the Auntie Anne's brand and proprietary information are protected after a franchise agreement ends.