What actions did the Assurance of Discontinuance (AOD) require Annex Brands to take regarding no-poaching provisions?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Annex Brands, Inc. Assurance of Discontinuance, Matter No. 19-2-26209-5 SEA, State of Washington, King County Superior Court. On October 7, 2019, we entered into an Assurance of Discontinuance ("AOD") with the State of Washington Office of Attorney General ("OAG"). The OAG had investigated us, as it is investigating all franchisors with State of Washington registrations, regarding the inclusion by franchisors of no-poaching provisions in their franchise agreements and the enforcement by franchisors of those provisions. No-poaching provisions in franchise agreements restrict franchisees from soliciting or hiring workers from the franchisor or other franchisees. The OAG alleges that no-poaching provisions are in restraint of trade and violate the State of Washington Consumer Protection Act. Before the OAG investigated us, we had voluntarily removed nopoaching provisions from our franchise agreements, and we had not enforced those provisions. Nevertheless, to avoid protracted and expensive litigation, and while expressly denying any violation of law, we entered into the AOD, which required us to: (a) refrain from including no-poaching provisions in future franchise agreements nationwide; (b) refrain from enforcing no-poaching provisions nationwide; (c) notify our franchisees of the AOD; (d) seek to amend all then-existing franchise agreements in the State of Washington to remove any no-poaching provisions; and (e) remove no-poaching provisions in thenexisting franchise agreements nationwide as they are renewed or renegotiated. We complied with, and are complying with, the AOD.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, an Assurance of Discontinuance (AOD) with the State of Washington Office of Attorney General (OAG) required specific actions related to no-poaching provisions. The OAG investigated franchisors, including Annex Brands, regarding the inclusion and enforcement of no-poaching provisions, which restrict franchisees from soliciting or hiring workers from the franchisor or other franchisees. The OAG alleged that these provisions restrained trade and violated the State of Washington Consumer Protection Act. Even though Annex Brands had already voluntarily removed these provisions and had not enforced them, they entered into the AOD to avoid litigation while expressly denying any violation of law.
The AOD mandated that Annex Brands (a) refrain from including no-poaching provisions in future franchise agreements nationwide, (b) refrain from enforcing existing no-poaching provisions nationwide, (c) notify their franchisees about the AOD, (d) seek to amend all existing franchise agreements in the State of Washington to remove any no-poaching provisions, and (e) remove no-poaching provisions in existing franchise agreements nationwide as they were renewed or renegotiated. The disclosure states that Annex Brands complied with, and is complying with, the AOD.
For a prospective franchisee, this means that Annex Brands cannot include or enforce no-poaching clauses in their franchise agreements. This provides franchisees with more flexibility in hiring and recruiting employees from within the Annex Brands network. Franchisees in Washington State should have already had these provisions removed or amended in their agreements, and franchisees nationwide will see these provisions removed upon renewal or renegotiation of their agreements. This assurance protects franchisees from restrictions that could limit their ability to staff their businesses effectively.