Does Annex Brands consider a transfer of ownership interest due to death a transfer?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. DEATH OR DISABILITY OF FRANCHISEE. Upon the death or permanent disability of Franchisee or, if Franchisee is a corporation, partnership, LLC or other entity, the owner of a controlling interest in the Franchise or Franchisee, or the executor, administrator, conservator, guardian or other personal representative of such person or entity, will transfer such person or entity's ownership interest to a third party approved by Franchisor. Transfer of such interest in the Franchise or Franchisee (including transfer by bequest or inheritance) will be completed within a reasonable time, not to exceed 6 months from the date of death or permanent disability, and will be subject to all the terms and conditions applicable to transfer contained in this Section 13. Failure to transfer such interest in the Franchise or Franchisee within said period of time may constitute a default of this Agreement. For purposes of this Agreement, the term "permanent disability" will mean a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent Franchisee or an owner of a controlling interest in the Franchise or Franchisee from managing and/or supervising the Center as required under Subsection 9.H of this Agreement for a period of 90 days from the onset of such disability, impairment or condition.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the death of a franchisee or owner of a controlling interest is considered a transfer of ownership. Specifically, if the franchisee is an entity, such as a corporation, partnership, or LLC, the death of the owner of a controlling interest triggers the transfer provisions. The executor, administrator, conservator, guardian, or other personal representative is responsible for transferring the ownership interest to a third party approved by Annex Brands. This transfer must be completed within six months from the date of death. Failure to complete the transfer within this timeframe may result in a default of the Franchise Agreement.
This requirement ensures that Annex Brands maintains control over who operates its franchised locations, even in the event of unforeseen circumstances like death. The six-month window provides a reasonable timeframe for the deceased's estate to handle the transfer while minimizing disruption to the business. The new owner must be approved by Annex Brands, ensuring they meet the franchisor's standards and qualifications.
Prospective franchisees should be aware of these transfer conditions, as they will impact estate planning. Franchisees may want to discuss with Annex Brands what specific criteria a potential transferee must meet to facilitate a smoother transfer process. Additionally, franchisees should consider the financial implications of a required transfer, including any associated transfer fees or costs for the estate or heirs.