To what extent are transfer fees collectable by Annex Brands?

According to the 2025 FDD, Annex Brands can collect transfer fees to the extent that these fees accurately reflect the franchisor's reasonable estimated or actual costs associated with facilitating the transfer. This means that Annex Brands cannot arbitrarily inflate transfer fees to generate profit; the fees must be tied to the real expenses they incur during the transfer process.

For a prospective Annex Brands franchisee, this is important because it provides some protection against excessive transfer fees. If a franchisee decides to sell their franchise, the transfer fees charged by Annex Brands should be justifiable based on the actual work and costs involved in the transfer. Franchisees have the right to question fees that seem unreasonable or disproportionate to the services provided during the transfer.

This policy ensures transparency and fairness in the transfer process, preventing Annex Brands from exploiting franchisees by imposing exorbitant fees. It aligns with common franchise industry practices, where transfer fees are generally intended to cover legitimate administrative and legal costs rather than serve as a revenue source. Franchisees should carefully review the transfer fee structure outlined in the franchise agreement and seek clarification from Annex Brands regarding any potential transfer-related costs.