Can Annex Brands elect to give modifications to the franchise agreement greater applicability than just the jurisdiction where it was ordered?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to be bound by any promise or covenant imposing the maximum duty permitted by law which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement, that may result from striking from any of the provisions of this Agreement, or any specification, standard or operating procedure prescribed by Franchisor, any portion or portions which a court or arbitrator may hold to be unenforceable in a final decision to which Franchisor is a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court or arbitration order. Such modifications to this Agreement will be effective only in such jurisdiction, unless Franchisor elects to give them greater applicability, and will be enforced as originally made and entered into in all other jurisdictions.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, modifications to the franchise agreement resulting from a court or arbitration order are typically effective only in the specific jurisdiction where the ruling was issued. However, Annex Brands retains the discretion to extend the applicability of these modifications beyond that jurisdiction if they choose to do so.
This means that if a court in a particular state finds a specific clause of the Annex Brands franchise agreement to be unenforceable, that change would initially only apply to franchises operating within that state. However, Annex Brands has the option to implement that change across its entire franchise system, affecting all franchisees regardless of their location.
For a prospective Annex Brands franchisee, this clause offers a degree of flexibility. While changes are typically limited to the jurisdiction where they were mandated, there is a possibility that a favorable ruling in one area could lead to broader, system-wide improvements in the franchise agreement. However, it also means that Annex Brands can impose changes beyond a single jurisdiction. Franchisees should consider this when evaluating the potential impact of legal decisions on their franchise agreement.