What constitutes a 'curable default' that could lead to termination of an Annex Brands franchise?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary | |
|---|---|---|---|
| (a) | Length of the franchise term | 2.A | 20 years. |
| (b) | Renewal or extension of the term | 14.A | An additional 20-year term. |
| (c) | Requirements for you to renew or extend | 14.A to C | Substantially comply with franchise agreement and all other agreements with us or our affiliates; notify us of intent to renew 6-12 months before 20-year anniversary of execution of franchise agreement; show evidence of right to possess site, or secure approved substitute site; fully comply with specifications and standards for franchised businesses; sign general release; sign then current franchise agreement and related agreements; pay renewal fee. At the expiration of the term, if you seek to renew your franchise, you may be asked to sign a new franchise agreement that contains terms and conditions materially different from those in your previous franchise agreement, such as different fee requirements and territorial rights. |
| (d) | Termination by you | Not applicable | Subject to state law. |
| (e) | Termination by us without cause | Not applicable | We cannot terminate your franchise without cause. |
| (f) | Termination by us with cause | 3.A, 14.D and 15 | We may terminate your franchise only if you default. |
| (g) | "Cause" defined-curable defaults | 15.B | You fail to pay required sums when due to us or our affiliates and do not cure within 10 days after notice; you fail to comply with franchise agreement, manuals, operating procedures, standards or specifications and do not cure within 30 days after notice; you fail to operate the franchise for 5 consecutive business days and do not cure within 7 days after notice. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 71–74)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands can terminate a franchise agreement if the franchisee defaults. Certain defaults are classified as 'curable,' meaning the franchisee has an opportunity to correct the issue and avoid termination.
Specifically, a curable default includes failing to pay required sums to Annex Brands or its affiliates when due, provided the franchisee does not cure this failure within 10 days after receiving notice. Another curable default is failing to comply with the franchise agreement, manuals, operating procedures, standards, or specifications, if the franchisee does not correct the failure within 30 days after notice. Lastly, ceasing to operate the franchise for five consecutive business days constitutes a curable default if the franchisee does not resume operations within seven days after receiving notice.
It is important for prospective Annex Brands franchisees to understand these curable defaults, as they represent situations where the franchisee has a limited time to rectify the issue and maintain their franchise agreement. Failing to cure these defaults within the specified timeframes can lead to termination of the franchise by Annex Brands.