What are the conditions under which Annex Brands may refuse to renew a franchise agreement, considering the franchisee's obligations in Item 9?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
transferee.
14. RENEWAL OF FRANCHISE
- A. FRANCHISEE'S RIGHT TO RENEW. Franchisee will have the right to renew the Franchise for an additional 20-year term, subject to the terms and conditions in Franchisee's then-current franchise agreement. The following renewal terms and conditions apply under this Agreement:
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- Franchisee has, during the entire term of the Franchise granted under this Agreement, substantially complied with all of the provisions of this Agreement and all of the provisions of any other agreements between Franchisee and Franchisor or any of its affiliates, and has stayed in substantial compliance with this Agreement and such agreements up to the date of renewal;
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- Franchisee has given written notice of renewal to Franchisor as provided in Subsection 14.B of this Agreement;
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- Franchisee has maintained possession of the Center, and by the expiration of the term of the Franchise granted under this Agreement, has brought the Center into full compliance with the specifications and standards then applicable for Centers operating under the specified brand; or Franchisee has secured substitute premises approved by Franchisor prior to the expiration of the term of the Franchise granted under this Agreement, if Franchisee is unable to maintain possession of the Center, or if in Franchisor's reasonable business judgment the Center should be relocated;
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- Franchisee has executed the renewal agreements and releases as provided in Subsection 14.C of this Agreement; and
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- Franchisee has paid Franchisor a $8,500 renewal fee.
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- B. NOTICES BY FRANCHISEE AND FRANCHISOR. If Franchisee desires to renew the Franchise on the 20-year anniversary of the execution date of this Agreement, Franchisee must give Franchisor written notice of his, her or their desire to renew the Franchise not more than 12 months and not less than 6 months prior to the 20-year anniversary of the execution date of this Agreement. Within 90 days after its receipt of such timely given notice, Franchisor will give Franchisee written notice of: 1) reasons which could cause Franchisor not to renew, including any deficiencies which require correction and a schedule for correction of the deficiencies by Franchisee; and 2) Franchisor's then-current requirements relating to the image, appearance, decoration, furnishing, equipping and stocking of new Centers operating under the desig
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, a franchisee has the right to renew their franchise for an additional 20-year term, but this is contingent upon meeting certain conditions. Annex Brands may refuse renewal if the franchisee has not substantially complied with all provisions of the franchise agreement and any other agreements with Annex Brands or its affiliates during the entire term of the franchise. This compliance must extend up to the date of renewal.
Additionally, the franchisee must provide written notice of their intent to renew to Annex Brands within a specific timeframe: not more than 12 months and not less than 6 months before the 20-year anniversary of the agreement's execution date. The franchisee must also maintain possession of the center and ensure it meets the current specifications and standards for centers operating under the brand by the time the franchise term expires. If maintaining possession is not possible, the franchisee needs to secure a substitute premises approved by Annex Brands before the expiration date, especially if Annex Brands deems relocation necessary.
Finally, to complete the renewal process, the franchisee must execute the required renewal agreements and releases and pay Annex Brands an $8,500 renewal fee. Annex Brands will notify the franchisee within 90 days of receiving the renewal notice, detailing any reasons that could lead to non-renewal, including any deficiencies that need correction and a schedule for addressing them. They will also provide the franchisee with the then-current requirements for the image, appearance, and equipping of new centers operating under the brand.