On what basis should the Annex Brands franchisee accept a franchise for the proposed site?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE ACKNOWLEDGES AND AGREES THAT FRANCHISOR'S APPROVAL OF A PROPOSED SITE AND ANY INFORMATION IMPARTED TO FRANCHISEE REGARDING THE PROPOSED SITE WILL NOT CONSTITUTE A WARRANTY OR REPRESENTATION OF ANY KIND, EXPRESSED OR IMPLIED, AS TO THE SUITABILITY OF THE PROPOSED SITE FOR THE CENTER, OR FOR ANY OTHER PURPOSE, AND FRANCHISOR'S APPROVAL OF SUCH SITE SIGNIFIES MERELY THAT FRANCHISOR IS WILLING TO GRANT A FRANCHISE FOR THE PROPOSED SITE. FRANCHISEE FURTHER ACKNOWLEDGES AND AGREES THAT HIS, HER OR THEIR ACCEPTANCE OF A FRANCHISE FOR THE PROPOSED SITE WILL BE BASED SOLELY ON HIS, HER OR THEIR OWN INDEPENDENT INVESTIGATION OF THE SUITABILITY OF SUCH PROPOSED SITE.
B. LEASE OR SUBLEASE OF PREMISES FOR THE CENTER. Franchisor has the right to approve the terms of the lease or sublease of the Center. Franchisee agrees to deliver a copy of the proposed lease or sublease to Franchisor for its approval at least 10 days prior to its execution by Franchisee, and to deliver a final, executed copy to Franchisor within 5 days after execution. Franchisee agrees that it will not execute a lease or sublease for the Center that has, for any reason, been disapproved by Franchisor. Franchisee acknowledges and agrees that Franchisor's approval of the terms of any lease or sublease will not constitute a warranty or representation of any kind, expressed or implied, relating to the economic terms of such lease or
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, an Annex Brands franchisee's decision to accept a franchise for a proposed site should be based solely on their own independent investigation of the site's suitability. While Annex Brands may approve a proposed site, this approval doesn't constitute any warranty or representation regarding the site's suitability for the Center or any other purpose; it merely indicates Annex Brands' willingness to grant a franchise for that location.
This means that prospective franchisees must conduct their own due diligence to determine if the location is viable for their Annex Brands business. This investigation should include assessing factors such as local demographics, competition, visibility, accessibility, and other physical characteristics of the premises. While Annex Brands may offer assistance from corporate personnel in location selection, the ultimate responsibility for evaluating the site rests with the franchisee.
Annex Brands also has the right to approve the terms of the lease or sublease for the Center. The franchisee must submit the proposed lease to Annex Brands for approval at least 10 days before execution and provide a final copy within 5 days after execution. The franchisee cannot execute a lease that Annex Brands has disapproved. However, Annex Brands' approval of the lease terms does not constitute a warranty or representation regarding the economic terms of the lease. The lease will also be subject to a Collateral Assignment of Lease and include terms reasonably acceptable to Annex Brands, including provisions that allow Annex Brands to take over the lease under certain conditions.