Following the Conclusion of a franchise, what geographic restriction applies to the Annex Brands franchisee's obligation not to divert business or harm goodwill?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. divert or attempt to divert any business or customer of any Retail Center or Commercial Logistics Center to any competitor, or do anything injurious or prejudicial to the goodwill associated with ABI's Marks or System for a two
- (2) year period following the Conclusion of the Franchise under the Franchise Agreement and without geographic restriction;
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, after the conclusion of a franchise agreement, a franchisee is restricted from diverting business or harming the goodwill associated with Annex Brands' marks or system. This restriction applies for a period of two years following the conclusion of the franchise agreement.
Notably, this particular restriction has no geographic limitations, meaning it applies regardless of where the former franchisee operates. This is a broad restriction intended to protect Annex Brands from former franchisees unfairly competing and leveraging the brand's reputation to their advantage.
This lack of geographic restriction is more stringent than the restriction on operating a competing business, which is limited to a 5-mile radius of the former Annex Brands location or any other Retail Center or Commercial Logistics Center. Franchisees should be aware of this potentially broad restriction and how it might impact their business activities after leaving the Annex Brands system.