Auntie Anne’s Pretzels Franchise Cost & Fees

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Description

Year Business Began: 1990 Franchising Since: 1991 Headquarters: Atlanta, Georgia Estimated Total Number of Units: 1,830Franchise Description: Auntie Anne’s Franchisor SPV LLC is the franchisor. Auntie Anne’s retail shops offer fresh baked soft pretzels, lemonade and related foods and beverages. 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, which may include alcoholic beverages.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 Shop – a temporary stand at a farmers’ market, concession trailer, or food truck where a franchisee produces and sell a range of Auntie Anne’s products.Training Overview: For the first Shop, the franchisor 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 the franchisor deems necessary and appropriate. The program will be conducted at the franchisor’s Support Center in Lancaster, Pennsylvania or other locations authorized by the franchisor, from time to time. The training accounts for 44 hours of classroom training and between 24 and 64 hours of on-the-job training. To facilitate the opening of the Shop, the franchisor 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. The franchisor may periodically conduct a conference, convention, program, or additional training session.Territory Granted: The Franchise Agreement does not give franchisees 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. In limited circumstances, the franchisor permits its franchisees to hold limited time “off-site events.” These off-site events, catering for example, must be pre-approved, be in full compliance with operational standards, and may require additional sales reporting measures to be implemented by the franchisee.Obligations and Restrictions: If the franchisee is an individual, he or she must either serve as or designate a manager. An entity franchisee must designate a manager, who may also be the Primary Contact. The 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 the franchisor requires of all franchisees in the Auntie Anne’s System. Franchisees may offer in the Shop to customers only the Approved Products that the franchisor has approved in writing. Franchisees may not produce or offer any products (i) that the franchisor does not authorize franchisees to produce or sell or (ii) that the franchisor directs franchisees not to produce or sell.Term of Agreement and Renewal: The length of the initial franchise term is 20 years. If franchisees operate a Concession Shop, the term will be 5 years. One 20-year renewal term is available, if the franchisee complies with renewal requirements. If franchisees operate a Concession Shop, there is no option for a renewal term.Financial Assistance: The franchisor does not offer financing for trade fixtures, opening inventory, or any other purpose. The franchisor may refer franchisees to leasing or financing companies not affiliated with it. Currently, the franchisor does not guarantee a franchisee’s note, lease or obligation. The franchisor may engage an advisor who will provide consulting services to franchisees to assist them with securing financing, and the franchisor may pay the advisor for this assistance to franchisees. The franchisor will not be responsible for the consultant’s provision of services to franchisees and if franchisees choose to use the consultant, they must sign the consultant’s form of agreement. In certain, limited cases, the franchisor or its affiliate may sublease a location to a qualified franchisee. On a limited basis, the franchisor 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. The franchisor may modify the Franchise Agreement, if necessary, to comply with SBA requirements for franchisees to participate in certain SBA loan programs. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial Franchise Fee $5,000 $30,000 Real Estate Varies Leasehold Improvements, Furniture and Fixtures $16,000 $185,000 Equipment & SmallWares $10,500 $45,000 Business Permits and Licenses $500 $600 Initial Inventory $3,300 $4,000 Insurance $2,000 $10,000 Training $1,000 $7,500 Grand Opening Advertising $1,000 $5,000 Signage $3,500 $12,000 Office Equipment and Supplies $0 $25,000 Professional Fees$5,000$10,000 Additional Funds (3 months) $15,000 $51,000 ESTIMATED TOTAL* (Excluding Real Estate) $62,800 $385,100 *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. Other Fees 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 The franchisor’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 The franchisor’s cost. Subsequent Training, Initial Training Fee Currently, up to $500 per trainee. On-site Training and Assistance A reasonable fee, currently, $250 per day 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 $1,000 annually. Carvel Product Platform Training Fee $750 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 Monthly rental fee, which may be calculated as (i) a flat dollar amount or (ii) a percentage of Net Sales derived from the SRU (currently, 8%), up to a maximum dollar amount (currently, $1,600 to $2,500, depending on the type of SRU). Lease Documentation Fee $500 per month (or partial month) until delivered Remote Location Baking License Fee $3,000 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; $2,000 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 provided. Gift Card and Loyalty Program Fees Amount of fees. POS System Support Fee Currently, estimated to be between $25 and $250 per month depending on the level of support the franchisee selects. Credit Card Fees Equipment costs and set up fees estimated to be up to $1,000 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, $0.17 to $0.27 per case purchased through certain Appointed Distributors. Ordering Support FeeA reasonable fee, which will vary based on the services provided. Development Deadline Extension Fee $2,500 per missed deadline. Non-compliance Fee Currently, $25 to $500 for a single violation, but may vary based on the severity of violations, number of violations, and repetition of violations. 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. Appraiser’s Fee 50% of appraiser’s fee. Indemnification of Auntie Anne’s The franchisor’s cost Attorneys’ Fees The franchisor’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 The franchisor’s actual costs, plus interest and an administrative fee equal to 15% of its actual costs The above information has been compiled from the FDD of Auntie Anne’s Pretzels. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
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 The franchisor’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 The franchisor’s cost.
Subsequent Training, Initial Training Fee Currently, up to $500 per trainee.
On-site Training and Assistance A reasonable fee, currently, $250 per day 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 $1,000 annually.
Carvel Product Platform Training Fee $750
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 Monthly rental fee, which may be calculated as (i) a flat dollar amount or (ii) a percentage of Net Sales derived from the SRU (currently, 8%), up to a maximum dollar amount (currently, $1,600 to $2,500, depending on the type of SRU).
Lease Documentation Fee $500 per month (or partial month) until delivered
Remote Location Baking License Fee $3,000
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; $2,000 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 provided.
Gift Card and Loyalty Program Fees Amount of fees.
POS System Support Fee Currently, estimated to be between $25 and $250 per month depending on the level of support the franchisee selects.
Credit Card Fees Equipment costs and set up fees estimated to be up to $1,000 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, $0.17 to $0.27 per case purchased through certain Appointed Distributors.
Ordering Support Fee A reasonable fee, which will vary based on the services provided.
Development Deadline Extension Fee $2,500 per missed deadline.
Non-compliance Fee Currently, $25 to $500 for a single violation, but may vary based on the severity of violations, number of violations, and repetition of violations.
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.
Appraiser’s Fee 50% of appraiser’s fee.
Indemnification of Auntie Anne’s The franchisor’s cost
Attorneys’ Fees The franchisor’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 The franchisor’s actual costs, plus interest and an administrative fee equal to 15% of its actual costs