Franchise: Auntie Anne’s Pretzels
Franchising Since: 1989
Headquarters: Lancaster, Penn.
Estimated Number of Units: 1,700
About the Franchise
In 1988, “Auntie” Anne Beiler and her husband, Jonas purchased a farmers market stand in Downingtown, Penn. and experimented with a soft pretzel recipe. The rest, as they say, is history.
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Auntie Anne’s opened its first franchise location in 1989 and have added a variety of new pretzel flavors, dipping sauces and beverage products since then. Thanks to the fresh, hot, hand-rolled soft pretzels and strong business model, the company has more than 1,700 stores today.
As the world’s largest soft pretzel franchise, Auntie Anne’s stores can be found in malls, transportation sites, colleges and universities and non-traditional shopping and entertainment centers around the globe.
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.
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.
Breakdown of Costs
The following information is compiled from the Franchise Disclosure Document of Auntie Anne’s (2015). The FDD will provide you with in-depth information regarding the costs and expenses you can plan to incur when developing a Auntie Anne’s franchise.
Franchise Fee: $27,000 to $30,000
Real Estate: Varies
The franchisor expects that the most attractive locations for Shops will be in enclosed retail malls, airports, and travel plazas. The typical location for a Shop is in a high-traffic or retail mall area. Shops typically range in size from 400 to 600 square feet.
Leasehold Improvements, Furniture and Fixtures: $90,000 to $175,000
The costs of construction, leasehold improvements, furniture, and fixtures depend upon the size and condition of the premises, the nature and extent of leasehold improvements required, the local cost of contract work in accordance with local governing authorities, and the location of the Shop.
Equipment & SmallWares: $35,000 to $45,000
Equipment necessary for the operation of a Shop is listed on Auntie Anne’s InfoSource website. These purchases are not refundable.
Business Permits and Licenses: $175 to $600
You must obtain and pay for all necessary permits and licenses required to construct and operate your Shop, and these fees are generally not refundable.
Initial Inventory: $3,300 to $4,000
Your initial inventory must be purchased from approved or designated suppliers or according to Auntie Anne’s specifications. Initial inventory consists of various food products, beverages, paper products, cleaning supplies, and other supplies utilized in the operation of the Shop as well as other merchandise or products sold by the Shop.
Insurance: $2,000 to $5,000
You must obtain and maintain during the term of your Franchise Agreement, at your expense, a comprehensive business insurance program, including property, commercial general liability, automobile liability, business property, umbrella, employment practices liability, and workers’ compensation insurance. This figure estimates the cost of your insurance premiums for your first year of operation based on Auntie Anne’s minimum requirements. You should be aware that this cost may increase in the future if Auntie Anne’s exercises its right to require you to obtain insurance with higher policy limits.
Training: $1,000 to $7,500
Auntie Anne’s requires that the franchisee sends a minimum of 3 individuals to initial training. The franchisee and initial store manager(s) must attend and successfully complete the training program prior to the opening of the Shop. 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.
Grand Opening Advertising: $1,000 to $5,000
You must spend a minimum of $1,000 up to a maximum of $5,000 on a grand opening advertising program for each Shop. In some cases, the grand opening advertising requirements of your landlord may exceed those of Auntie Anne’s.
Signage: $4,000 to $12,000
The range of signage costs in the table is typical for most locations; however, the cost of the signage for a kiosk could be as high as $18,000 because of the need for signs on multiple sides of the kiosk.
POS System Equipment: $8,000 to $15,000
Office Equipment and Supplies: $5,000 to $10,000
Professional Fees: $5,000 to $10,000
Auntie Anne’s encourages you to, and in some cases you must, employ professionals, such as architects, attorneys, and accountants, to advice you in connection with the purchase and operation of your Shop. These fees will vary significantly depending upon the nature and extent of the advice that you seek, and the level of professional fees charged in your area. These fees are generally not refundable.
Additional Funds (3 months): $15,000 to $51,000
ESTIMATED TOTAL: $196,475 to $370,100
These figures are estimates in setting up a Auntie Anne’s franchise and operating it for three months. It is possible to exceed costs in any of the areas above.
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