Auntie Anne's Pretzels Franchise Cost & Fees
Date of Incorporation: 1990
Franchising Since: 1991
Headquarters: Lancaster, Pennsylvania
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.
- Subway Co-Brand Location- where the franchisee produces and sells a limited range of Auntie Anne’s products in conjunction with those products authorized to be sold under the Subway franchise system.
- Concession Trailer/Truck - 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 3 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 50 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.
Estimated Number of Units: 1,700
Auntie Anne's Shop
|Name of Fee||Low||High|
|Leasehold Improvements, Furniture and Fixtures||$90,000||$175,000|
|Equipment & SmallWares||$35,000||$45,000|
|Business Permits and Licenses||$175||$600|
|Grand Opening Advertising||$1,000||$5,000|
|POS System Equipment||$8,000||$15,000|
|Office Equipment and Supplies||$5,000||$10,000|
|Additional Funds (3 months)||$15,000||$51,000|
|ESTIMATED TOTAL (Excluding Real Estate)||$196,475||$370,100|
Subway Co-Brand Location*
|Name of Fee||Low||High|
|Leasehold Improvements, Millwork, Furniture and Fixtures||$16,000||$50,000|
|Equipment & SmallWares||$10,500||$22,500|
|Business Permits and Licenses||$500||$2,500|
|Grand Opening Advertising||$1,000||$5,000|
|Additional Funds (3 months)||$15,000||$51,000|
|ESTIMATED TOTAL (Excluding Real Estate)||$62,800||$170,000|
*These figures (i) do not include the cost of establishing the Subway restaurant in which the Subway Co-Brand Location is being added and (ii) only relate if the Subway Co-Brand Location is being retrofit into an existing Subway Restaurant within a Walmart location.
|Type of Fee||Amount|
|Royalty Fee||7% of Net Sales; 12.5% of Net Sales for Subway Co-Brand Locations.|
|Advertising Contribution||Unless otherwise agreed, 1% of Net Sales.|
|Advertising Cooperative Contribution||An amount set by the franchisee’s Advertising Cooperative.|
|Local Marketing Obligation||Each calendar quarter, the franchisee must spend not less than 1% of Net Sales on local market advertising.|
|Promotions||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.|
|EFT NSF Fee||Auntie Anne’s out-of-pocket costs and an administrative fee.|
|Interest||1.5% per month of maximum legal interest rate.|
|Late Fee for Reports, Financial Statements or Tax Returns||$50 per week for late financial statements; $100 per day for other reports and tax returns.|
|Taxes||Auntie Anne’s costs.|
|Subsequent Training, Initial Training Fee||Currently, up to $500 per trainee.|
|On-site Training and Assistance||A reasonable fee, currently, $50 per hour per trainer plus trainers' travel and living expenses.|
|Additional Support/Consulting Fee||A reasonable fee, currently, $500 per day, plus travel and living expenses.|
|Conference/Program Fee||A reasonable fee, which will vary by program.|
|Training/Cancellation Fee||Auntie Anne’s out-of-pocket costs.|
|Electronic Learning Management System||Amount of fees. Auntie Anne’s estimates the cost will be $500 to $750 annually.|
|Supplier/Product Evaluation Fee||The greater of $2,500 or the actual costs of the supplier/product evaluation process.|
|Rent||Will vary based on location and other factors; Auntie Anne’s estimates rent will range from $4,500 to $20,000 per month.|
|Relocation Fee||10% of the then-current Initial Franchise Fee.|
|Sublease Fee||$200 monthly|
|Lease Renewal/Extension Assistance Fee||$2,000|
|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 (approximately $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.|
|Lease Documentation Fee||$500 for each failure.|
|Regional Advisory Council Dues||$400 a year for each Franchisee entity (two representatives permitted); $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).
|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; $2000 for a 1 year renewal term.
For Farmers Market - $2,000 for a 20 year renewal; $500 for 1 year extension/renewal of Farmers Market.
|Computer Systems Fee||A reasonable fee, which will vary based on the services Auntie Anne’s provides.|
|Gift Card and Loyalty Program Fees||Amount of fees.|
|Polling and POS System Service and Support Recurring Fee||Estimated not to exceed $100 per month.|
|Credit Card Fees||Equipment costs and set up fees estimated to be up to $700 per terminal. Transaction fees estimated to be from 2.5% to 5.0% of transaction amounts. Other fees may apply depending on the vendor used for credit card processing.|
|Purchasing Program Fee||Reasonable membership fees assessed by the Purchasing Program.|
|Supply Chain Fee||Currently, $0.20 per case purchased through certain Appointed Distributors.|
|Development Deadline Extension Fee||$2,500 per missed deadline.|
|Non-compliance Fee||$400 a year for each Franchisee (two representatives), $75 for each additional participant
Currently, $25 to $500 for a single violation, but may vary based on the severity of defaults, number of defaults, and repetition of defaults.
|Failure to Comply with Standards or Law Fee||Up to a $5,000 fee plus Auntie Anne’s reasonable expenses connected with any inspection, examination, or analysis of products.|
|Repeated Inspection Fee||Cost of inspection.|
|Audit||Cost of audit.|
|Liquidated Damages||The average monthly amount of Royalty that the franchisee owed Auntie Anne’s during the past 36 months times the lesser of remainder of term of 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 term of Franchise Agreement or 36 months.|
|Appraiser’s Fee||50% of appraiser’s fee.|
|Indemnification of Auntie Anne’s||Auntie Anne’s cost.|
|Attorneys’ Fees||Auntie Anne’s cost.|
|Reinstatement Fee||10% of the amount of the then-current Initial Franchise Fee, plus Royalty Fees that would have been payable in period between termination and reinstatement.|
|De-identification Fee||Auntie Anne’s actual costs, plus interest and an administrative fee equal to 15% of our actual costs.|
The above information has been taken from the FDD of Auntie Anne's. Year of FDD: 2015
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