What is the duration of the non-compete agreement for employees of Annex Brands after termination of employment?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) For 1 year after termination of your engagement or employment, regardless of the cause of termination, you will not, without the written consent of us and Franchisor, directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any other person or entity, own, maintain, engage in, have any interest in or perform any service for any business that offers, or that franchises or licenses others to offer, products or services that are the same as or substantially similar to the products or services that were or could have been offered by us or Franchisor when you were engaged or employed, and that operates: (1) within our Protected Area, or (2) within the Protected Area of any other franchisee's Franchised Business operating at the time of termination.
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Reduction in Scope of Covenant.
You agree that we or Franchisor may, in our sole discretion, reduce (but never increase) the scope of any term or subpart of any term in this Agreement without your consent, effective immediately on written notice from us or Franchisor, and you agree that you will promptly comply with any term or subpart so modified, that will be fully enforceable notwithstanding any other term or subpart of this Agreement.
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.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, employees are subject to a non-compete agreement for one year after termination of employment. This restriction applies regardless of the reason for termination. During this one-year period, the employee cannot, without written consent from both the franchisee and Annex Brands, engage in or have any interest in a business that offers products or services similar to those offered by Annex Brands. This includes owning, maintaining, or performing services for such a business, or franchising/licensing others to do so.
The non-compete restrictions apply specifically within the protected area of the Annex Brands franchise where the employee was employed, as well as within the protected area of any other Annex Brands franchise operating at the time of termination. This means that the employee is restricted from working for a competitor within a defined geographic area around both their former location and other existing franchise locations.
It is important to note that Annex Brands or the franchisee has the discretion to reduce the scope of any term within the non-compete agreement, but they cannot increase it. This provides some flexibility, as the franchisor could potentially lessen the restrictions on a former employee. The agreement also specifies that the employee's covenants are independent of other terms and are conditions for employment. Any claims against the franchisee or Annex Brands do not serve as a defense against the enforcement of the non-compete agreement.
Prospective franchisees should be aware of these restrictions and ensure that their employees understand the terms of the non-compete agreement. Franchisees should also consider the potential impact on their ability to hire and retain employees, as well as the enforceability of these agreements in their specific state, as non-compete laws vary.