Does Annex Brands allow the transfer of the franchise agreement under the laws of intestate succession?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- 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 the transfer:
-
- The transferee, including all its officers, directors or partners will jointly and severally execute the then-current franchise agreement and other standard ancillary agreements thereby agreeing to be bound by all the terms and conditions of those agreement(s) (except that no additional initial franchise fee will be charged).
A transfer has the effect of superseding the previous franchise agreement, when a new franchise agreement is entered into with the transferee.
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 in the event of the franchisee's death through intestate succession. Specifically, the FDD addresses the transfer of rights under the Franchise Agreement, capital stock, partnership, LLC, or other ownership interest in the event of the death of the franchisee, or any shareholder, partner, member, or other owner of the franchisee, by will, declaration of or transfer in trust, or under the laws of intestate succession. This means that upon the death of a franchisee, their rights and interests in the Annex Brands franchise can be transferred to their heirs or beneficiaries according to the applicable laws of intestate succession.
However, such transfers are subject to certain conditions and require Annex Brands' approval. Annex Brands will not unreasonably withhold its approval of a requested transfer if the franchisee and its owners are in full compliance with the agreement. The proposed transferee must also meet Annex Brands' standards for franchisees, including demonstrating good moral character. If the transfer involves a controlling interest in the franchise, the transferee must execute the then-current franchise agreement and other standard ancillary agreements, agreeing to be bound by all the terms and conditions, although no additional initial franchise fee will be charged.
This provision ensures that the Annex Brands franchise can continue operating even after the death of the original franchisee, providing a potential benefit to the franchisee's family or estate. However, it's important to note that the transfer is not automatic and is contingent upon meeting Annex Brands' approval criteria and executing the necessary agreements. A new franchise agreement with the transferee supersedes the previous agreement. Prospective franchisees should carefully review the transfer provisions in the franchise agreement and discuss any concerns with Annex Brands to fully understand the requirements and implications of transferring the franchise in the event of death or other circumstances.