Auntie Anne's Franchise

Financing Details

Auntie Anne's does not offer general direct or indirect financing for items such as trade fixtures, opening inventory, or other general purposes. However, Auntie Anne's may, at its sole discretion and subject to availability, allow qualified franchisees to lease and operate a Satellite Retail Unit (SRU) as an additional selling location. This SRU lease is a form of direct financing. Additionally, on a limited basis, Auntie Anne's may provide a guaranty or other direct or indirect financing to selected franchisees who operate or distribute authorized products through special distribution outlets. Auntie Anne's also participates in the SBA's Franchise Directory, which may assist franchisees in securing third-party financing, but Auntie Anne's itself does not guarantee these loans or receive financial benefits from the lenders. Franchisees will need to arrange their own funding for most aspects of their business.

Litigation Summary

Auntie Anne's Franchisor SPV LLC has no litigation to report in Item 3. However, the FDD discloses three legal actions involving affiliated brands: Arby's Restaurant Group, Inc. and Dunkin' Brands, Inc., both indirect subsidiaries of GoTo Foods LLC (Auntie Anne's parent company). These cases, filed in 2019, concerned allegations by state Attorneys General regarding "no-poaching" provisions in franchise agreements. The affiliated companies entered into settlement agreements, which involved removing these provisions and not enforcing them in existing agreements, as well as posting notices to employees. Dunkin' Brands, Inc. also faced a lawsuit from the New York Attorney General in 2019 related to credential-stuffing cyberattacks, resulting in a 2020 consent agreement to pay penalties, issue customer notices, and maintain a comprehensive information security program. The FDD clarifies that none of these actions impact the Auntie Anne's brand or allege unlawful conduct by Auntie Anne's Franchisor SPV LLC.

Renewal Conditions

Auntie Anne's franchisees seeking renewal must have substantially and timely complied with all provisions of their Franchise Agreement and any other agreements with Auntie Anne's or its affiliates, or their landlord, and have no existing defaults by the expiration of the Initial Term. They must request renewal in writing no earlier than 12 months and no later than six months before the Initial Term expires, then complete and return a renewal application within 10 days of delivery. If approved, franchisees must agree to make significant capital expenditures for a Remodel within six months after the Renewal Term begins, sign the then-current form of franchise agreement, and pay a renewal fee equal to 20% of the then-current Initial Franchise Fee. They are also required to sign a general release, including their Owners, absolving Auntie Anne's and its affiliates from all claims as of the Renewal Agreement date. Lastly, franchisees must secure the right from their landlord to continue operating at the Accepted Location for the Renewal Term, or be prepared to relocate if the current location does not meet current standards.

Staffing Notes

Auntie Anne's requires franchisees to appoint a Primary Contact who will be responsible for, and have decision-making authority regarding, the shop and its operation. Each shop must have at least two dedicated Managers who have day-to-day management responsibility, exercise on-premises supervision, and personally participate in the direct operation of the shop. If a franchisee operates four or more shops, Auntie Anne's may require the hiring of one or more additional Managers to serve as a Director of Operations to provide support and supervision across multiple locations. In the event of a Primary Contact's, Manager's, or Director of Operation's death, disability, or termination, a successor must be designated within 30 days. All Primary Contacts, Managers, and Directors of Operations must successfully complete specified training programs.