Does Annex Brands allow the transfer of the franchise agreement by operation of law?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
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- transfer of any rights under this Agreement, any capital stock, partnership, LLC or other ownership interest in Franchisee, or any interest in the Center, in a divorce proceeding or otherwise by operation of law; and
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- transfer of any rights under this Agreement, any capital stock, partnership, LLC or other ownership interest in Franchisee, or any interest in the Center, in the event of the death of Franchisee, or any shareholder, partner, member or other owner of Franchisee, by will, declaration of or transfer in trust, or under the laws of intestate succession.
C.
CONDITIONS FOR FRANCHISOR APPROVAL OF TRANSFER BY FRANCHISEE.
If Franchisee and its owners are in full compliance with this Agreement and all other agreements between Franchisee and Franchisor or any of its affiliates, Franchisor will not unreasonably withhold its approval of a requested transfer that meets all the applicable requirements of this Subsection 13.C.
The proposed transferee or its owners must be individuals of good moral character and otherwise meet Franchisor's then-applicable standards for franchisees.
If the transfer is of a controlling interest in Franchisee, or is one of a series of transfers that in the aggregate constitute the transfer of a controlling interest in Franchisee, all of the following conditions must be met prior to, or concurrently with, the effective date of
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the franchise agreement can be transferred through operation of law. Specifically, this includes scenarios such as the transfer of rights in a divorce proceeding, or in the event of the franchisee's death through a will, trust, or intestate succession.
However, Annex Brands requires that several conditions be met before a transfer is approved. The franchisee and their owners must be in full compliance with the existing franchise agreement and all other agreements with Annex Brands. The proposed transferee must also meet Annex Brands' standards for franchisees, demonstrating good moral character.
If the transfer involves a controlling interest in the franchise, all conditions must be met before the transfer's effective date. This ensures that Annex Brands maintains control over who operates its franchises and that the new operators meet their standards. Franchisees should carefully review Section 13.C of the franchise agreement to fully understand the requirements and seek franchisor approval for any transfer to remain compliant.