Auntie Anne's

The termination rate of 3.5% is significantly higher than typical for quick service restaurants (0.0-1.03%). What are the primary reasons franchisees are being terminated, and has the franchisor documented these causes?

Terminations increased from 39 in 2022 to 41 in 2024. Can you provide a breakdown of which termination causes (from the 13 non-curable defaults) have been most commonly invoked, and whether any patterns suggest systemic issues?

The non-compete restriction is only 1 year and 3 miles, significantly narrower than typical (2 years and 5-10 miles). How does this shorter protection period affect your ability to prevent a franchisee from opening a competing business immediately after exit?

Your initial contract term is 20 years with one 20-year renewal option (total 40 years potential), both substantially longer than typical. What is the rationale for these extended terms, and what happens to a franchisee's investment if they cannot renew after 20 years?

The renewal fee is stated as 20% of the then-current initial franchise fee. Given the franchise fee is $35,500, could you provide a historical example of what the renewal fee was for franchisees renewing after 10 years?

The transfer fee of $17,750 exceeds typical ranges. Is this fee always charged at the same rate, or does it vary based on circumstances such as family transfers, internal transfers, or distressed sales?

What specifically triggers the mandatory arbitration clause, and how many disputes have been resolved through arbitration in the past 3 years? What were the outcomes?

Can you clarify the cure periods for all 10 curable defaults mentioned in the agreement? Specifically, which defaults have only 24-hour cure periods, and how is this timeline enforced?

The franchise agreement requires purchasing all proprietary ingredients and products from the franchisor or approved suppliers across 8 categories. Can you provide the list of these 8 categories and examples of products in each category?

Has the franchisor established pricing caps, minimum pricing, or rebate structures for products supplied or approved? If so, how are prices set, and how frequently are they adjusted?

Of the 49 closures in 2024, how many were voluntary closures by franchisees versus franchisor-initiated closures, and what were the primary financial or operational reasons cited?

The franchise agreement requires personal guaranty of payment and performance from all franchise owners. Are there any circumstances under which the franchisor waives this requirement, such as for corporate entities or multi-unit operators?

Can you provide copies of all indemnification clauses and specify what types of losses and expenses franchisees must indemnify the franchisor against? Has the franchisor exercised indemnification claims against franchisees?

The territory is protected but not exclusive. How does the franchisor define the protected territory, and what prevents the franchisor or another franchisee from opening a competing location within that territory?

What are the 8 renewal requirements that must be substantially complied with to qualify for renewal, and how does the franchisor measure substantial compliance?

The royalty rate of 7.0% exceeds the typical range (5.0-6.0%). Is this rate consistent across all unit types and locations, or does it vary? Have there been any increases to the royalty rate during the system's history?

Can you explain the difference between the 3.5% termination rate and the 4.1% overall exit rate? What accounts for the 0.6% difference, and what other exit types are included?

Has the franchisor entered into any class action litigation, regulatory investigations, or settlement agreements that are not yet reflected in the public litigation data?

What percentage of the 1,193 current units are in their first contract term versus renewal terms, and what is the renewal success rate for franchisees completing their initial 20-year term?