What is the extent of Annex Brands' liability or obligation to the franchisee with respect to the maintenance, direction, or administration of the Fund?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that the Fund is intended to maximize general recognition and patronage of the Marks and Centers for the benefit of Franchisor and all Centers. Franchisee agrees to participate in all Fund programs. Franchisee has the right to set its own prices, except that Franchisee agrees to honor fully all coupons, price-reduction promotions and other promotions/programs as directed by Franchisor. Franchisor undertakes no obligation in developing, implementing, or administering marketing or public relations programs to ensure that expenditures which are proportionate or equivalent to contributions from Centers in any geographic area are made for that area. Franchisor assumes no direct or indirect liability or obligation to Franchisee with respect to the maintenance, direction, or administration of the Fund except as expressly provided in this Agreement.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands assumes no direct or indirect liability or obligation to the franchisee regarding the maintenance, direction, or administration of the marketing fund, except as expressly provided in the Franchise Agreement.
This means that while franchisees contribute to the marketing fund, Annex Brands has significant discretion in how the fund is managed and spent. Franchisees do not have a guaranteed say in the fund's administration or how it benefits their specific location. However, Annex Brands will provide an unaudited report of the fund's operation annually within 90-120 days after each fiscal year end, which will be available to franchisees upon written request.
The fund can be used for various marketing and public relations activities at the national, regional, or local levels, including digital and traditional advertising, employing advertising agencies, and providing marketing materials to centers. Franchisees are required to participate in all fund programs and honor all coupons and promotions directed by Annex Brands. While Annex Brands may establish a Matching Funds Advertising Program, they are not obligated to ensure that expenditures are proportionate to contributions from centers in any specific geographic area. Franchisees are also expected to use additional funds for their own local marketing efforts.