Does Annex Brands consider a transfer of ownership interest in a divorce proceeding 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;
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- 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 a divorce proceeding or otherwise by operation of law; and
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, a transfer of any rights under the Franchise Agreement, any capital stock, partnership, LLC or other ownership interest in Franchisee, or any interest in the Center, in a divorce proceeding is considered a transfer that requires franchisor approval.
This means that if a franchisee's ownership interest in the Annex Brands franchise changes due to a divorce, it is treated as a transfer of ownership. As such, the franchisee must obtain Annex Brands' prior written approval. Failure to obtain this approval could result in a default of the Franchise Agreement.
Annex Brands states that they will not unreasonably withhold 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. If the transfer is of a controlling interest, the transferee will be required to execute the then-current franchise agreement and other standard ancillary agreements.