For Annex Brands, what is the dependency related to the success of the retail center?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Your retail center will receive a protected area. If you remain in compliance with the franchise agreement, we will not license another retail center or establish a company-owned retail center of the same type designated on Attachment 3 within your protected area. In addition, your retail center may be located within the protected territory of a Commercial Logistics Center, and a Commercial Logistics Center, or a residential and commercial moving business operated under another Mark, may be located within your protected area if you operate a standard or flex retail center (see our Commercial Logistics Center Franchise Disclosure Document for more information). In addition, we may periodically acquire an entity or a portion of its assets (i.e., franchise agreements, contracts, licenses, etc.), or we or a portion of our assets (i.e., franchise agreements, contracts, licenses, etc.) may be acquired by an entity, where such entity or assets, owns, operates or licenses businesses that offer the same or similar products and services as your retail center offers. The location or operation of such entities, assets or businesses (franchised or otherwise) within your protected area will not violate the franchise agreement.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
We grant you the right to operate 1 retail center at a mutually agreed on location designated on Attachment 3 to the franchise agreement. Your marketing and advertising activities related to your retail center, whether taking place within or extending beyond your protected area, must conform to our policies, as specified in our Manuals, in writing or otherwise. The policies apply to Internet and other digital activities such as any approved websites, email marketing programs, social media platforms, online directory listings, and other online networking platforms, as well as to print and other traditional forms of marketing and advertising.
Generally, when you sign a lease for the premises of your retail center, we will determine your protected area according to the following factors: 1) location; 2) population; 3) proximity to similar businesses; 4) number of other businesses providing the same or similar services; 5) demography of the area; 6) growth potential; and 7) market trends. The following standards for each type of retail center applies:
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD page 70)
What This Means (2025 FDD)
According to the 2025 FDD, the success of an Annex Brands retail center is dependent on the franchisee remaining in compliance with the franchise agreement. If the franchisee complies with the agreement, Annex Brands will not license another retail center or establish a company-owned retail center of the same type within the franchisee's protected area. This protected area is determined based on factors such as location, population, proximity to similar businesses, the number of other businesses providing similar services, the area's demography, growth potential, and market trends. These factors are used to establish standards for each type of retail center.
However, the FDD also states that franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, outlets that Annex Brands owns, or other channels of distribution or competitive brands that Annex Brands controls. Additionally, an Annex Brands retail center may be located within the protected territory of a Commercial Logistics Center, and vice versa, if the retail center is a standard or flex retail center. Annex Brands also retains the right to acquire entities or assets that operate similar businesses within a franchisee's protected area, which would not be considered a violation of the franchise agreement.
In summary, while Annex Brands provides a protected area for its retail centers, the protection is conditional on the franchisee's compliance with the franchise agreement and is subject to several exceptions that could introduce competition within the protected area. A prospective franchisee should carefully consider these factors and how they might impact the potential success of their Annex Brands retail center.