What actions must the Annex Brands franchisee take to demonstrate their independent contractor status?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- During the term of the Franchise, Franchisee will hold itself out to its 3) prospective employees, and to its employees, as an independent contractor operating the Center pursuant to rights granted by Franchisor, but not jointly with Franchisor.
Franchisee will take any reasonable action that Franchisor considers necessary to that end, including: (i) stating conspicuously on each employment application that the prospective employee is applying to be Franchisee's employee and not an employee of Franchisor; (ii) stating Franchisee's entire business name, rather than just using Franchisor's brand name and/or logo, on Franchisee's payroll checks and/or payroll-related communications to employees; and (iii) requiring employees to sign acknowledgements that they are not employees of Franchisor, even though they are selling products and services identified by Franchisor's brand name and/or logo, are receiving payroll checks and other communications that contain Franchisor's brand name and/or logo, may have applied for jobs through Franchisor's website, or may communicate with or receive non-mandatory feedback, coaching or recommendations from representatives of Franchisor in emails or other electronic or written communications, or during telephone calls, meetings or inspections.
Franchisor reserves the right to specify and change the content and form of these statements and acknowledgements.
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- Nothing in this Agreement authorizes Franchisee to make any contract, agreement, warranty or representation on Franchisor's behalf; to incur any obligation, debt or expense in Franchisor's name; or to make any representation to any third party tending to indicate a business relationship with Franchisor beyond that created under this Agreement.
Franchisor disclaims any liability for, and will not be liable under this Agreement for, any claim or judgment arising as a result of any such action by Franchisee.
Nor will Franchisor be liable by reason of any of Franchisee's acts or omissions in the operation of the Center, or for any claim or judgment arising therefrom against Franchisee or Franchisor.
Under this Agreement, no party is responsible for any obligations, debts or expenses of any other party.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands requires franchisees to present themselves as independent contractors, not as being jointly operated with the franchisor. To that end, Annex Brands franchisees must take specific actions to reinforce their independent status with prospective and current employees.
These actions include stating on employment applications that the applicant is applying to be the franchisee's employee, not Annex Brands's employee. Franchisees must also use their full business name, rather than solely the Annex Brands brand name or logo, on payroll checks and other payroll-related communications. Additionally, franchisees must have employees sign acknowledgements confirming they are not employees of Annex Brands, even if they are selling branded products/services, receiving payroll containing the Annex Brands name/logo, applied through the Annex Brands website, or receive non-mandatory feedback from Annex Brands representatives.
Annex Brands retains the right to modify the content and format of these statements and acknowledgements. The FDD also states that the franchise agreement does not authorize franchisees to make contracts, agreements, warranties, or representations on Annex Brands's behalf, incur debts in Annex Brands's name, or represent any business relationship beyond what the franchise agreement establishes. Annex Brands disclaims liability for any claims or judgments resulting from the franchisee's actions and omissions in operating the center.