Auntie Anne's Pretzels
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Date of Incorporation: 1990
Franchising Since: 1991
Headquarters: Lancaster, Pennsylvania
Country: U.S.
Description: Auntie Anne's, Inc. offers franchises for the establishment, development and operation of facilities offering offers hand-rolled soft pretzels, pretzel dogs, lemonade, and other food and beverage products all prepared with specified recipes and procedures.
Franchise Offer: The franchisor, Auntie Anne's Inc., grants to qualified persons the right to own and operate an Auntie Anne's Franchised Business under the Auntie Anne's trademarks at a location approved by Auntie Anne's and specified in the Franchise Agreement. The Franchised Businesses operate from enclosed malls, airports, outlet centers, casinos, strip centers, store fronts, farmers' markets, train stations and other retail locations. Auntie Anne's, in its sole discretion and subject to availability, also grants to qualified franchisees the right to lease and operate a Satellite Retail Unit (SRU) as an additional selling location within the mall, airport, enclosed building or other retail location where an existing Franchised Business is located, as specified.
Financial Assistance: Auntie Anne's does not offer direct or indirect financing nor does it place financing with any lender. Auntie Anne's does not guarantee the franchisee’s note, lease or obligation. However, Auntie Anne's may provide selected franchisees who operate or distribute authorized products through special distribution outlets a guaranty or other direct or indirect financing. Auntie Anne’s has a program to allow franchisees to pay the franchise fee in two installments. Auntie Anne’s also participates in the Small Business Administration (SBA) Franchise Registry Program. Auntie Anne’s will modify the Franchise Agreement to permit the franchisee to give the SBA or SBA-approved lender a security interest in the Franchised Business.
Training and Assistance: Auntie Anne's requires that the franchisee sends a minimum of three individuals to initial training: the franchisee, another partner, shareholder or member of the franchisee’s business organization, and the initial store manager. All of these individuals attending the training must successfully complete all phases of the training program. The franchisee and initial store manager(s) must attend and successfully complete the training program prior to the opening of the Franchised Business. The training accounts for over 68 hours of classroom training and between 24 and 64 hours of on-the-job training. After completion of the initial training, the franchisee may be required to work in an existing Auntie Anne's location for up to five days prior to the opening of his or her Store. To facilitate the opening of the Auntie Anne's business, Auntie Anne's will send one or more of its representatives to the Franchised Business, at Auntie Anne's expense, for up to six days concurrent with beginning operations. Auntie Anne's may provide, and require the franchisee, managers and/or employees to attend and successfully complete refresher training programs or continuing education seminars to be conducted at Auntie Anne's headquarters or other location designated by Auntie Anne's.
Territory: The franchisee will be granted a franchise for a specific Store location ordinarily within a mall, concourse, facility, building or other defined area. The franchisee will have no exclusive territory and no territorial rights within the Facility within which the Store is located. The franchisee may not operate his or her Store at any other site within the Facility in which his or her Store is located without Auntie Anne's prior written permission.
Term of Agreement and Renewal: The term of the agreement will expire 20 years from the store opening date for the Franchised Business. The franchisee may renew for an additional successive term equal to 20 years according to the then-current franchise agreement. The franchisee may also opt to extend the term by paying a $2,000 fee for each year the franchise is extended up to a maximum of five years at which time the Franchise will expire.
Obligations and Restrictions: Auntie Anne’s strongly recommends that the franchisee participates personally in the direct operation of the franchise business, although they are not specifically obligated to do so by the Franchise Agreement. In the event that a full-time manager for the store is designated, the franchisee must remain active in monitoring the operation of the Auntie Anne's franchise business. The initial full-time manager of the franchised business must have successfully completed a training program as specified by Auntie Anne's. The franchisor will make training available to the manager during the regularly scheduled training course(s). However, recruiting, training and motivating employees are the responsibility of the franchisee, and the franchisee must be able to organize the business so that the standards of quality, service and cleanliness are consistently maintained. The franchisee is required to attend all scheduled Auntie Anne's regional and system wide corporate events that Auntie Anne's requires of all franchisees in the Auntie Anne's System. The franchisee must offer for sale and only sell at the Store and/or SRU only those Menu Items, Trademarked Product Lines and other categories of food and beverage products that Auntie Anne's periodically authorizes.
Total Number of Units: Over 1,200 units worldwide.
Investment Tables:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Franchise Fee | $30,000 | |
| Lease, Utility & Security Deposits | $4,000 | $7,000 |
| Leasehold Improvements, Furniture and Fixtures | $90,000 | $175,000 |
| Equipment | $35,000 | $45,000 |
| Business Permits and Licenses | $175 | $600 |
| Initial Inventory | $3,300 | $4,000 |
| Insurance | $400 | $2,500 |
| Training | $1,000 | $7,500 |
| Grand Opening Advertising | $500 | $5,000 |
| Signage | $4,000 | $12,000 |
| Point of Sale Equipment | $8,000 | $15,000 |
| Office Equipment and Supplies | $5,000 | $10,000 |
| Professional Fees | $5,000 | $10,000 |
| Additional Funds (3 months) | $15,000 | $51,000 |
| ESTIMATED TOTAL | $201,375 | $374,600 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Continuing Services and Royalty Fee | 7% of Gross Sales; 8% of Gross Sales for Subway Co-Brand Locations |
| Advertising and Marketing Fund | 1% of Gross Sales; 4.5% of Gross Sales for Subway Co-Brand Locations |
| Special Promotion Items | Auntie Anne's cost plus a markup |
| Late Fee | 1½% per month on amounts due Auntie Anne's not to exceed the legal limit |
| Audit Fee | All expenses for the audit incurred by Auntie Anne's |
| Transfer Fee | $6,000 for each transfer. If the transfer is done to cure a default or in lieu of termination Auntie Anne's has the right to increase the fee to $9,000. |
| Entity Transfer Fee | $1,000 for each transfer |
| Returned Check/EFT Fee | $25 first NSF check or EFT returned; $50 each additional occurrence in subsequent 12 month period. |
| Ongoing Training and Refresher Courses | No specified amount |
| Service Fee | $250 a day for each member |
| Indemnification | Varies |
| Sublease Fee | $200 monthly or as agreed by Parties |
| Evaluation of Suppliers | Auntie Anne's cost |
| Regional Advisory Council Dues | $400 a year for each Franchisee (two representatives) $75 for each additional participant |
| Operation in Event of Death or Disability | Auntie Anne's Cost |
| Operation in Event of Default | $250 per day plus travel, lodging and meals |
| Relocation of Franchised Business | 25% of the then current franchise fee |
| Lease Renewal/Extension Assistance Fee | $2,000 |
| Lease Documentation Late Penalty Fee | $500 |
| Franchisor's Lost Profits Following Termination | The average monthly amount of Royalty owed to Auntie Anne’s during the past 36 months times the lesser of remainder of term of the Franchise Agreement or 36 months. If less than 36 months have passed since opening and termination, the amount will be the average monthly Royalty during the time between opening and termination, times the lesser of remainder of the term of the Franchise Agreement or 36 months. |
| Satellite/Specialty Retail Unit Fee | $500 non-refundable initial fee; $750 training fee; monthly rental fee of 8% of Gross Sales up to the maximum monthly rent for the unit (currently $1,571.15 per five week month and $2,423.10 for a baking SRU);$1,000 refundable security deposit; $3,000 baking license fee; shipping costs to and from the franchisee’s Store; plus additional cost for modular add-ons |
| Remote Location Baking License Fee | $3,000 |
| Miscellaneous Fees | No specified amount |
| Lost Company Manuals Fee | $700 per each missing manual. |
| Overdue Fee | $50 per week or partial week for failure to submit accurate and timely year end and monthly Financial Statements |
| Polling Service Recurring Fee | Not to exceed $100 per month |
| Franchise Renewal Fee | The greater of $15,000 or 50% of the then current discounted franchise fee. For Concession Trailer franchises the greater of $7,000 or 50% of the then current franchise fee for Concession Trailer franchises. |
Date of FDD: 2012
The above information has been compiled from the FDD of Auntie Anne’s.
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