Are my covenants in the agreement with Annex Brands considered independent of other terms?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
this Agreement.
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- Covenants As Independent and As Conditions Precedent to Employment or Engagement. Your covenants in Section 1 are independent of any other terms of this Agreement, and are conditions precedent to engagement or employment. Any claim or cause of action against us or Franchisor, whether predicated on this Agreement or otherwise, will not be a defense to the enforcement by us or Franchisor of the covenants in Section 1.
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- Covenants Concerning Company Property. You agree that all our records, including but not limited to records of our customers and all other records relating in any manner to our franchised business, whether prepared by you or otherwise coming into your possession, are the exclusive property of us or Franchisor, in accordance with the terms of our franchise agreement with Franchisor.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to the 2025 FDD, the covenants within the agreement with Annex Brands are designed to be independent of other terms. Specifically, the agreement states that your commitments and responsibilities outlined in Section 1 are not contingent on any other aspect of the agreement. This means that even if there are disputes or issues related to other parts of the agreement, your covenants remain fully enforceable.
This independence has significant implications for a prospective Annex Brands franchisee. It means that any claims or legal actions you might have against Annex Brands or its franchisor cannot be used as a defense if they try to enforce the covenants in Section 1. For example, if you believe Annex Brands has breached the agreement in some way, you cannot withhold compliance with your non-compete obligations as a form of retaliation or negotiation.
This clause is designed to protect Annex Brands' interests by ensuring that franchisees fulfill their key obligations, such as maintaining confidentiality and not competing unfairly, regardless of any other disputes. Franchisees should be aware of this provision and understand that their covenants are a primary and independent obligation under the agreement. This is a fairly common practice in franchising, as franchisors want to ensure brand standards and trade secrets are protected even if other aspects of the relationship are in dispute.
Furthermore, Annex Brands or its franchisor retains the right to modify the scope of any term within the agreement, reducing (but never increasing) its reach without needing your consent. This modification becomes effective immediately upon written notice, and you are obligated to comply with the altered term. This clause grants Annex Brands considerable flexibility to adjust the agreement's terms as needed, potentially impacting your obligations and rights as a franchisee.