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Auntie Anne's Pretzels Franchise Cost & Fees

Date of Incorporation: 1990

Franchising Since: 1991

Headquarters: Lancaster, Pennsylvania

Country: U.S.

 

Description: Auntie Anne's, Inc. offers franchises for Auntie Anne's retail shops offering fresh baked soft pretzels, lemonade and related foods and beverages.

 

Franchise Offer: The franchisor offers franchises to operate Auntie Anne's Franchised Businesses under the Auntie Anne's trademarks, at an approved location. The descriptions for a franchise for a single Auntie Anne's Shop, and an Auntie Anne's Concession Trailer are as follows:

  • Shop - where the franchisee produces and sells a full range of Auntie Anne's products.
  • Concession Trailer - a self-contained mobile unit where the franchisee produces and sells a limited-range of Auntie Anne's products.

 

Financial Assistance: Auntie Anne's does not offer financing for trade fixtures, opening inventory, or any other purpose. Auntie Anne's may refer franchisees to leasing or financing companies not affiliated with it. Currently, Auntie Anne’s does not guarantee a franchisee’s note, lease or obligation. The franchisor has engaged an advisor who will provide consulting services to franchisees to assist them with securing financing and the franchisor will pay the advisor for this assistance to franchisees. Auntie Anne’s will not be responsible for the consultant’s provision of services. 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. All training attendees must be over the age of 18. 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 Shop. Initial Training will cover many aspects of the operation of the Franchised Shop including financial controls, sanitation and maintenance procedures, marketing and advertising techniques, service and operational techniques, food preparation, familiarization with recipes and cooking procedures, deployment of labor and maintenance of quality standards, as Auntie Anne's deems necessary and appropriate. The training accounts for over 68 hours of classroom training and between 24 and 64 hours of on-the-job training. 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 a minimum of two days concurrent with beginning operations. Auntie Anne's may periodically make available to the franchisee or managers additional training programs, or conduct a conference, convention, program, or training session.

 

Territory: The Franchise Agreement does not the franchisee any territorial rights or protections in any geographic area. The Franchise Agreement licenses the franchisee to manufacture and sell Auntie Anne’s products at retail only from a specific Auntie Anne's Shop location that the franchisor accepts. The franchisor does not grant the franchisee any exclusive territory or other territorial rights under these agreements other than the right to sell Auntie Anne's products at retail from the Shop. The franchisee may face competition from other franchisees, from outlets that Auntie Anne’s owns, or from other channels of distribution or competitive brands that Auntie Anne’s controls.

 

Term of Agreement and Renewal: The length of the initial franchise term is 20 years. The franchisee may also opt to extend the term by paying a $2,000 fee for each year the franchise is extended.

 

Obligations and Restrictions: If the franchisee is an individual, he or she must either serve as or designate a Shop manager. An entity franchisee must designate a Shop manager. The Shop manager, who will have day-to-day management responsibility for the Shop, will exercise on-premises supervision and personally participate in the direct operation of the Shop. Franchisees are 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. Franchisees must offer and sell all services, products, and programs that Auntie Anne’s requires franchisees to sell and that are part of the System, or that Auntie Anne’s incorporates into the System in the future.

 

Total Number of Units: 1,400

 

Investment Tables:

Initial Investment:

Name of Fee Low High
Franchise Fee $27,000 $30,000
Real Estate
Varies Varies
Leasehold Improvements, Furniture and Fixtures $90,000 $175,000
Equipment & Small Wares
$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 $1,000 $5,000
Signage $4,000 $12,000
POS System 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 (Excluding Real Estate)
$194,875 $367,600

 

Other Fees:

Name of Fee Amount
Royalty Fee 7% of Net Sales.
Advertising Contribution 1% of Net Sales.
Promotion
Costs to purchase, lease, and install all materials necessary for promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items, loyalty cards, and gift cards. Auntie Anne’s may charge its costs plus a reasonable administrative fee.
Credit Card Fees Equipment costs and set up fees estimated at $700 per terminal. Transaction fees estimated to be from 2.5% to 5% of transaction amounts. Other fees may apply depending on the vendor used for credit card processing.

Polling Service Recurring Fee

Not to exceed $100 per month.
Gift Card and Loyalty card Fees
Equipment costs and set up fees estimated to be up to $500 if not able to be tied into a credit card terminal purchased from credit card provider or tied into the POS System.
Returned Check or NSF/EFT Fee $25 first Insufficient Funds (NSF) check or electronic funds transfer (EFT) returned; $50 each additional occurrence in subsequent 12 month period.
Ongoing Training, Onsite Training and Assistance
$30 per hour plus trainers’ expenses on a flat fee per program.
Consulting Fee $250 a day for each member plus member's expenses.
Training Cancellation Fee
Auntie Anne’s out-of-pocket costs.
Non-Proprietary and Proprietary Products Varies
Adulteration. Dilution or Failure of Sanitation Inspection Fee Auntie Anne's Cost.
Interest 1.5% per month of maximum legal interest rate.
Taxes Auntie Anne's Cost.
Advances Auntie Anne's Cost.
Relocation of Shop 10% of the then-current Initial Franchise Fee.
Transfer Fee 50% of the then-current initial franchise fee for the type of Shop the franchisee will operate: if it is a transfer to a related party, 10% of the then-current initial franchise fee for the type of the Shop the franchisee will operate.
Renewal Fee 50% of the then-current initial franchise fee for a 20 year renewal, except for a farmer's market - $500 for a 20 year renewal: $2,000 for a 1 year extension/renewal.

For Concession Trailer: $1,000 for a 20 year renewal.

Liquidated Damages 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.
Appraiser's Fee 50% of appraiser’s fee.
Indemnification of Auntie Anne's Auntie Anne's Cost.
Attorney's Fees Auntie Anne's Cost.
Sublease Fee $200 monthly or as agreed by Parties.
Supplier/Product Evaluation Fee Cost of supplier/product evaluation process.
Reinstatement Fee 10% of the amount of the then-current Initial Franchise Fee for the type of Shop the franchisee will operate.
Regional Advisory Council Dues $400 a year for each Franchisee (two representatives), $75 for each additional participant

$200 per year for each single-unit Franchisee entity that operates a seasonal or limited day Shop (e.g. shore points or farmers markets)

Lease Renewal/Extension Assistance Fee $2,000
Lease Documentation Late Penalty Fee $500
Satellite/Specialty Retail Unit Fee $500 initial fee; $750 training fee; monthly rental fee of 8% of Net 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.
Audit Cost of audit.
Late Fee for Financial Statements $50 per week or partial week for failure to submit accurate and timely year end and monthly Financial Statements.
Late Fee for Reports and Tax Returns $100 per day for failure to submit accurate and timely required accounting reports and tax returns.

Date of FDD: 2013

The above information has been compiled from the FDD of Auntie Anne’s.

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