Following the conclusion of an Annex Brands franchise, what activities are franchisees prohibited from engaging in regarding similar businesses within a 5-mile radius?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
OR DIVERT. During the term of the Franchise and for a continuous 2-year period after any transfer, or after the expiration, termination or non-renewal of the Franchise, either directly or indirectly, or through an Immediate Family Member, as an employee, manager, consultant, operator, lender, investor, financier, representative, disclosed or beneficial owner, part owner, proprietor, partner, principal, officer, director, co-venturer, stockholder (except as the owner of securities listed on a stock exchange or
traded on the over-the-counter market that represent 5% or less of that class of securities), member, agent, participant or in any other capacity, Franchisee agrees to not:
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- have any interest in a business that offers business support, mailbox rental (physical and virtual), package receiving, postal, printing and copying (including digital printing and copying), digital transfer, offset printing, large-format printing, binding, finishing, personalized mailing, direct mail, packaging, crating, pick-up and delivery, palletizing, freight, shipping, office supply, boxes and packaging materials, notary or fingerprinting products or services, or related products or services ("competitive business"), and that is located within a radius of 5 miles of: a) the Center or b) any Center or Commercial Logistics Center in operation or under construction on the effective date of any transfer, or the expiration, termination or non-renewal of the Franchise; or
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- divert or attempt to divert any business or customer of the Center to a competitive business.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, for a period of two years after the conclusion of the franchise agreement, franchisees are restricted from certain competitive activities within a 5-mile radius of their former Annex Brands location or any other operational or under-construction Annex Brands or Commercial Logistics Center. The term 'Conclusion' encompasses the expiration, termination, non-renewal, or transfer of the franchise.
Specifically, franchisees are prohibited from having any interest in a business that offers business support, mailbox rental (both physical and virtual), package receiving, postal services, printing and copying (including digital and offset), digital transfer, large-format printing, binding, finishing, personalized mailing, direct mail, packaging, crating, pick-up and delivery, palletizing, freight, shipping, office supplies, boxes and packaging materials, notary, or fingerprinting products or services. This encompasses a broad range of services typically offered by Annex Brands.
The restrictions apply whether the franchisee engages in these activities directly or indirectly, including through family members or other business entities. This non-compete clause aims to protect Annex Brands' market share and goodwill by preventing former franchisees from leveraging their experience and knowledge gained during their franchise term to compete against the Annex Brands system shortly after leaving the franchise.
It is important for prospective franchisees to understand the scope and duration of these post-term non-compete restrictions, as they could significantly impact their ability to pursue similar business ventures after the franchise agreement ends. Franchisees should carefully consider these limitations and how they align with their long-term business goals and plans.