Does Annex Brands consider a gift of capital stock in the franchisee a transfer?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignments, sales or other transfers subject to the foregoing restriction include, without limitation, the following:
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- sale, gift or other transfer of capital stock, or of a partnership, LLC or other ownership interest, in Franchisee;
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- merger or consolidation of Franchisee with another corporation, or issuance of capital stock, partnership, LLC or other ownership interests in Franchisee;
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, a gift of capital stock in the franchisee is considered a transfer that requires the franchisor's approval. Specifically, the franchise agreement states that the franchisee cannot transfer any interest in the franchise, the agreement, the center, or the assets of the center without prior written approval from Annex Brands.
The document lists examples of transfers that are subject to this restriction, including the sale, gift, or other transfer of capital stock, or of a partnership, LLC, or other ownership interest in the franchisee. Also included is the merger or consolidation of the franchisee with another corporation, or issuance of capital stock, partnership, LLC, or other ownership interests in the franchisee.
This means that if a franchisee wishes to gift shares of their Annex Brands franchise to someone else, they must first obtain approval from Annex Brands. Failure to do so constitutes a default of the franchise agreement and conveys no rights to the recipient. This requirement allows Annex Brands to maintain control over who owns and operates its franchises, ensuring that all franchisees meet their standards and are capable of upholding the brand's reputation.