What action did Annex Brands take in response to the lawsuit filed by Siew May Seow?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Siew May Seow v. Annex Brands, Inc., Case Number 2023-00027996-CU-FR-CTL , San Diego Superior Court. On June 30, 2023, our franchisee, Siew May Seow ("Plaintiff"), filed an action in San Diego Superior Court naming us as Defendant, and alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, false promise, and restitution. We received notice of the action on July 6, 2023. On July 27, 2023, Plaintiff filed an amended complaint to add a claim for conversion based on the same facts alleged in the original
complaint. In January 2023, Plaintiff had signed a franchise agreement granting her the right and obligation to open and operate a Postal Annex+ Center, and paid us an initial franchise fee of $29,950. Plaintiff asserts that she was unable to secure financing, and seeks a refund of the initial franchise fee, punitive damages, attorney fees and costs, and prejudgment interest. We filed a motion to compel arbitration, since the franchise agreement contains an arbitration provision. On April 5, 2024, the Court granted our motion and stayed Plaintiff's action. On May 29, 2024, Plaintiff filed a Demand for Arbitration (AAA, San Diego, California, Case No. 01-24-0005-7170). As of the date of this disclosure document, an arbitration hearing was scheduled to occur on March 19, 2025. We deny that Plaintiff is entitled to any relief, and we intend to defend against Plaintiffs' claims on their merits.
Source: Item 3 — Litigation (FDD pages 16–17)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, in response to the lawsuit filed by Siew May Seow, Annex Brands filed a motion to compel arbitration, citing an arbitration provision within the franchise agreement. The court granted Annex Brands' motion on April 5, 2024, and stayed the Plaintiff's action. Subsequently, on May 29, 2024, the Plaintiff filed a Demand for Arbitration. As of the date of the 2025 disclosure document, an arbitration hearing was scheduled for March 19, 2025. Annex Brands denies that the Plaintiff is entitled to any relief and intends to defend against the claims on their merits.
The lawsuit, initiated on June 30, 2023, by franchisee Siew May Seow, includes claims for breach of contract, breach of the implied covenant of good faith and fair dealing, false promise, and restitution. The Plaintiff later amended the complaint on July 27, 2023, to include a claim for conversion based on the same facts. The dispute arose after the Plaintiff signed a franchise agreement in January 2023, paid an initial franchise fee of $29,950, and was allegedly unable to secure financing. The Plaintiff is seeking a refund of the initial franchise fee, punitive damages, attorney fees and costs, and prejudgment interest.
This situation highlights the importance of understanding the legal and financial obligations outlined in the franchise agreement, including provisions for dispute resolution such as arbitration. For a prospective franchisee, this underscores the need to conduct thorough due diligence, secure adequate financing, and carefully review all contract terms before entering into a franchise agreement with Annex Brands. The outcome of the arbitration could have financial implications for both the franchisee and Annex Brands, depending on the arbitrator's decision.