Does Annex Brands consider failure to pay interest as a breach?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
In accordance with the franchise agreement between me and Annex Brands, Inc. ("COMPANY") and all other agreements between me and COMPANY or its affiliates, I hereby authorize COMPANY to withdraw funds by initiating entries to my account at the financial institution indicated above ("BANK"), and to initiate adjustments for any erroneous transactions, if necessary. Each Wednesday after the close of business or at such other interval established by COMPANY. I agree to submit a completed Unit Sales Report ("Report") to COMPANY each Saturday, after the close of business and before midnight, for the week ending that Saturday, or at such other interval established by COMPANY. COMPANY agrees that the amount due on the Report for royalty fees, marketing fees, and any other fees (but not national convention participation deposits or technology fees), including but not limited to fees for additional email accounts and insurance premiums, will be the amount withdrawn from my account on the following Wednesday or at such other interval established by COMPANY, unless COMPANY notifies me of an adjusted amount. National convention participation deposits and technology fees will be withdrawn each Tuesday from my account after the close of business or at such other interval established by COMPANY. I further authorize COMPANY to initiate entries for any amounts owed by me to COMPANY or its affiliates, including but not limited to amounts owed for Association fees and assessments, expenses, equipment lease or rental payments and/or supplies payments, purchases from COMPANY and/or its affiliates, interest, late fees, or any other indebtedness to COMPANY or its affiliates, on prior written notice to me. I authorize BANK to accept all entries by COMPANY to my account.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, failure to pay interest is considered a breach of the franchise agreement. Specifically, Annex Brands is authorized to withdraw funds from the franchisee's account for various amounts owed, including interest. This authorization extends to amounts owed to Annex Brands or its affiliates. This includes, but is not limited to, amounts owed for Association fees and assessments, expenses, equipment lease or rental payments and/or supplies payments, purchases from Annex Brands and/or its affiliates, interest, late fees, or any other indebtedness to Annex Brands or its affiliates, on prior written notice.
This means that Annex Brands franchisees are contractually obligated to ensure sufficient funds are available in their designated account for automatic withdrawals. These withdrawals cover royalty fees, marketing fees, and other fees, including interest. If a franchisee fails to pay interest or any other fees, Annex Brands can initiate withdrawals for these amounts, with prior written notice to the franchisee.
For a prospective Annex Brands franchisee, this highlights the importance of maintaining diligent financial management and open communication with Annex Brands. Franchisees should carefully track all fees and payments to avoid any discrepancies or missed payments that could lead to fund withdrawals. Understanding the withdrawal authorization process and ensuring compliance with payment obligations is crucial for maintaining a positive relationship with Annex Brands and avoiding potential breaches of the franchise agreement.