Does Annex Brands allow competition from company-owned outlets within a franchisee's territory?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Your retail center will receive a protected area. If you remain in compliance with the franchise agreement, we will not license another retail center or establish a company-owned retail center of the same type designated on Attachment 3 within your protected area. In addition, your retail center may be located within the protected territory of a Commercial Logistics Center, and a Commercial Logistics Center, or a residential and commercial moving business operated under another Mark, may be located within your protected area if you operate a standard or flex retail center (see our Commercial Logistics Center Franchise Disclosure Document for more information). In addition, we may periodically acquire an entity or a portion of its assets (i.e., franchise agreements, contracts, licenses, etc.), or we or a portion of our assets (i.e., franchise agreements, contracts, licenses, etc.) may be acquired by an entity, where such entity or assets, owns, operates or licenses businesses that offer the same or similar products and services as your retail center offers. The location or operation of such entities, assets or businesses (franchised or otherwise) within your protected area will not violate the franchise agreement.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — Territory (FDD pages 62–64)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, franchisees are not granted an exclusive territory and may face competition from company-owned outlets. While Annex Brands provides a protected area where they will not license another franchise or establish a company-owned retail center of the same type, this protection is not absolute.
The FDD clarifies that Annex Brands may acquire other entities or assets that own or operate similar businesses within a franchisee's protected area. The operation of these acquired businesses, whether franchised or company-owned, does not constitute a violation of the franchise agreement. This means that even within a franchisee's protected area, competition from businesses acquired by Annex Brands is possible.
This policy has significant implications for prospective franchisees. It highlights the risk of facing competition from company-owned or affiliated businesses even within the protected area. While Annex Brands offers a protected area, its acquisitions strategy could introduce competition that impacts a franchisee's market share and profitability. Franchisees should carefully consider this potential for competition when evaluating the franchise opportunity and assessing the market potential of their chosen location.