What actions are Annex Brands franchisees prohibited from doing regarding customers after the franchise expires or terminates?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| (r) | Non-competition covenants after transfer, or after the franchise expires, terminates or is not renewed | 13.C, 16.D and Attachment 11 | Cannot divert customers or have any interest in a competitive business within 5-mile radius of franchised business or any of our other franchised businesses for continuous 2-year period. | | (i) Your obligations after transfer, expiration, termination or non renewal | 16 and Attachment 11 | After transfer (as applicable), expiration, termination or non-renewal: you must pay sums owed us within 10 days; cease using our Marks; remove signs and other materials with our Marks; de-identify; alter appearance of franchised business, comply with post-term non competition and non-interference covenants; transfer to us all telephone and fax numbers, classified or other telephone and fax directory listings, email addresses, domain names, email marketing programs, social media platforms, online directory listings, other networking platform listings, or other comparable electronic identities, that are associated with our Marks or related to your retail center; cancel fictitious name registrations; return our Manuals; cease use of our confidential information; on our request, furnish to us a copy of center's sales history and customer database for the most recent 2-year period (or shorter if applicable); permit us to enter, operate and attempt to sell your retail center, if we elect. If you do not comply, you also must pay our expenses in enforcing our rights.
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 71–74)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, after the franchise expires, terminates, or is not renewed, franchisees are restricted from certain activities related to customers and competition. Specifically, franchisees cannot divert customers or have any interest in a competitive business within a 5-mile radius of the former franchised business or any other Annex Brands franchised business. This restriction applies for a continuous 2-year period.
In practical terms, this means that a former Annex Brands franchisee cannot actively solicit or attempt to attract customers away from their previous location or any other existing Annex Brands location within that 5-mile radius for two years. This includes starting a similar business that would directly compete with Annex Brands. The purpose of this non-compete clause is to protect Annex Brands's customer base and the interests of its existing franchisees.
Additionally, upon expiration, termination, or non-renewal, the franchisee must, among other things, transfer to Annex Brands all telephone and fax numbers, classified or other telephone and fax directory listings, email addresses, domain names, email marketing programs, social media platforms, online directory listings, other networking platform listings, or other comparable electronic identities, that are associated with Annex Brands's Marks or related to the retail center. They must also furnish to Annex Brands a copy of the center's sales history and customer database for the most recent 2-year period (or shorter if applicable) upon request.
These post-termination obligations are fairly standard in franchising to protect the brand and goodwill that Annex Brands has established. Prospective franchisees should carefully consider these restrictions and how they might impact their future business plans should they decide to leave the Annex Brands system.