Considering an Auntie Anne’s Franchise? Don’t Overlook These 49 Important Franchise Fees

Updated September 20, 2020.

If you are considering an Auntie Anne’s franchise, don’t get blindsided by these 49 important franchise fees (from the initial franchise fee, to the royalty fee, to 47 other fees found in Items 5 and 6 of Auntie Anne’s 2020 FDD).

1.  Initial Franchise Fee:  $20,000 to $30,000

• When you sign a Franchise Agreement for an Auntie Anne’s Shop, you must pay an initial franchise fee (the “Initial Franchise Fee”). The Initial Franchise Fee for a Shop is $30,000.

• For the second and any additional franchise purchased by you, a discount of 10% of the then-current Initial Franchise Fee will be granted.

• Auntie Anne’s currently has a second Shop incentive program with a reduced Initial Franchise Fee of $5,000 when you open a second permanent baking inline or kiosk Shop in the same location or venue. This second Shop incentive program does not apply to Satellite Retail Units (SRUs) or Pretzel Bike Units (PBUs). Auntie Anne’s reserves the right to extend or withdraw any of these programs at any time.

• Auntie Anne’s participates in the International Franchise Association’s VetFran program. For qualifying veterans or members of the Armed Forces, the Initial Franchise Fee is $20,000.

2.  Satellite Retail Unit (SRU) and Concession Trailer/Truck:  varies

• If you qualify to operate an SRU, you will be required to execute an SRU Addendum and SRU Lease Agreement. Upon execution of the SRU Lease Agreement, you will be required to pay the following: (i) a $600 non-refundable set-up fee, the proceeds of which are, in part, used to pay or defray the expenses and costs incurred by Auntie Anne’s to set up the SRU; (ii) a security deposit in the amount of $1,000; and (iii) two months’ advance rent at the maximum rent for the unit (currently, $1,600 to $2,500, depending on the type of SRU).

3.  Royalty Fee:  7% of Net Sales

• Due Date:  Payable on or before Friday of each week on the Net Sales for the previous week (or on any other basis stated in the Manuals or in Auntie Anne’s written notice to you).

4.  Advertising Contribution:  currently, 1% of Net Sales

• Due Date:  Same as Royalty Fee.

5.  Advertising Cooperative Contribution:  an amount set by your Advertising Cooperative

• Due Date:  Same as Royalty.

6.  Local Marketing Obligation: each calendar quarter, you must spend not less than 1% of Net Sales on local market advertising

• Due Date:  Each calendar quarter.

7.  Promotions:  costs to purchase, lease, and install all materials necessary for promotional campaigns, including counter cards, posters, banners, signs, photographs, giveaway items, loyalty cards, and gift cards. Auntie Anne’s may charge you its costs, plus a reasonable administrative fee.

• Due Date:  As incurred.

8.  EFT Nonsufficient Funds Fee:  Auntie Anne’s out-of-pocket costs and an administrative fee

• Due Date:  On invoice.

9.  Interest:  1.5% per month or maximum legal interest rate

• Due Date:  On invoice.

10.  Reporting Late Fee:  $50 per week for late financial statements; $100 per day for late reports, tax returns, and the statements of initial investment costs

• Due Date:  On invoice.

11. Taxes and Other Payments:  Auntie Anne’s cost

• Due Date:  Within 10 days after demand.

12.  Subsequent Trainee Initial Training Fee:  currently, up to $500 per trainee

• Due Date:  Before attending training.

13.  On-Site Training and Assistance:  a reasonable fee; currently, $250 per day per trainer, plus trainers’ travel and living expenses

• Due Date:  On invoice.

14.  Additional Support Consulting Fee:  a reasonable fee; currently, $500 per day, plus travel and living expenses

• Due Date:  On invoice.

15.  Plan Review Fee:  $1,000 per set of drawings

• Due Date:  On invoice.

16.  Conference/Program Fee:  a reasonable fee, which will vary by program

• Due Date:  As incurred.

17.  Training Cancellation Fee:  Auntie Anne’s out-of-pocket costs

• Due Date:  On invoice.

18.  Electronic Learning Management System:  the then-current fee. Currently, Auntie Anne’s estimates the cost will be $40 to $500 annually.

• Due Date:  As incurred.

19.  Carvel Product Platform Training Fee:  $750

• Due Date:  On invoice.

20.  Relocation Fee:  10% of the then-current Initial Franchise Fee

• Due Date:  Before Auntie Anne’s signs relocation Franchise Agreement.

21.  Lease Renewal Extension Assistance Fee:  $2,000

• Due Date:  Due and payable upon the execution of the lease renewal/extension by the landlord.

22.  Lease Documentation Late Fee:  $500 per month (or partial month) until delivered

• Due Date:  As incurred.

23.  SRU 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)

• Due Date:  On invoice.

24.  Remote Location Baking License Fee:  $3,000

• Due Date:  As incurred.

• This annual fee applies when baking is done at a location remote from the franchised location.

25.  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)

• Due Date:  By March 30th of each year.

26.  Transfer Fee:  50% of the then-current Initial Franchise Fee if it is a Control Transfer; if it is a transfer to a related party or that is not a Control Transfer, 10% of the then-current Initial Franchise Fee

• Due Date:  At transfer closing.

27.  Renewal Fee:  50% of the then-current Initial Franchise Fee for a 20-year renewal; $2,000 for a 1-year renewal term

• Due Date:  30 days prior to expiration of 20-year term; before Auntie Anne’s signs the renewal Franchise Agreement.

28.  Computer Systems Fee:  a reasonable fee, which will vary based on the services provided

• Due Date:  As needed.

29.  POS System Support Fee:  currently, estimated to be between $50 and $250 per month

• Due Date:  As incurred.

30.  Mobile Device Management Fee:  currently, $2.06 per device per month, starting on the second anniversary of your Shop opening

• Due Date:  As incurred.

31.  Back Office and Polling Software Fee:  currently, estimated to be between $100 and $200 per month

• Due Date:  As incurred.

32.  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.

• Due Date:  As incurred.

33.  Master Insurance Policy Fee:  currently not charged; Auntie Anne’s does not have an estimate at this time

• Due Date:  As incurred.

34.  Information Security and Compliance Fees:  amount of fees; estimated to be between $75 and $125 per month

• Due Date:  As incurred.

35.  Gift Card and Loyalty Program Fees:  amount of fees

• Due Date:  As incurred.

36.  Purchasing Program Fee: reasonable membership fees assessed by the Purchasing Program

• Due Date:  As incurred.

37.  Supply Chain Fee:  currently, $0.17 to $0.27 per case purchased through certain Appointed Distributors

• Due Date:  As incurred.

38.  Ordering Support Fee:  a reasonable fee, which will vary based on the services provided

• Due Date:  As incurred.

39.  Development Deadline Extension Fee:  $2,500 per missed deadline

• Due Date:  On invoice.

40.  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

• Due Date:  On invoice.

41.  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

• Due Date:  On invoice.

42.  Repeated Inspection Fee:  cost of inspection

• Due Date:  On invoice.

43.  Audit:  cost of audit

• Due Date:  On invoice.

• If Auntie Anne’s audits you and finds that you understated Net Sales by 2% or more, you must reimburse it all reasonable expenses connected to the audit, review, or examination (including any reasonable accounting and attorneys’ fees). Auntie Anne’s estimates that the typical audit costs would be approximately $1,000 to $4,000.

44.  Liquidated Damages:  the average monthly amount of Royalty that you owed Auntie Anne’s during the past 36 months, times the lesser of the remainder of term of the Franchise Agreement or 36
months

• Due Date:  Within 30 days of termination of your Franchise Agreement.

45.  Appraiser’s Fee:  60% of appraiser’s fee

• Due Date:  On invoice.

• You must pay this fee only if Auntie Anne’s elects to purchase your assets on termination or expiration of the Franchise Agreement and Auntie Anne’s cannot agree with you on the purchase price.

46.  Indemnification of Auntie Anne’s:  Auntie Anne’s cost

• Due Date:  On invoice.

• You indemnify Auntie Anne’s from certain losses and expenses under the Franchise Agreement.

47.  Attorneys’ Fees:  Auntie Anne’s cost

• Due Date:  On invoice.

• If Auntie Anne’s becomes a party to a proceeding on an Agreement between it and you, and it wins, or if it becomes a party to litigation or insolvency proceedings for your franchise, then you must pay its reasonable attorneys’ fees and court costs.

48.  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

• Due Date:  Before reinstatement.

• If Auntie Anne’s terminates your Franchise Agreement due to a health and safety default, you cure the default and want to be reinstated, and it agrees to reinstate your Franchise Agreement, you must pay it a reinstatement fee.

49.  De-identification Fee:  Auntie Anne’s actual costs, plus interest, and an administrative fee equal to 15% of its actual costs

• Due Date:  On invoice.

• Payable if Auntie Anne’s terminates the Franchise Agreement, you fail to de-identify the Shop, and it makes the required changes on your behalf.