Does the Annex Brands franchise agreement allow for involuntary transfers?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns, transfers and sets over unto ANNEX BRANDS, INC., a California corporation ("Assignee"), all of Assignor's right, title and interest as tenant in, to and under that certain lease, a copy of which is attached hereto as Exhibit A (the "Lease"), respecting premises commonly known as (the "Premises"). This Assignment is for collateral purposes only and, except as specified herein, Assignee will have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment or the Lease unless Assignee will take possession of the Premises demised by the Lease pursuant to the terms hereof and will assume the obligations of Assignor thereunder. |
|---|
| Assignor represents and warrants to Assignee that it has full power and authority to assign |
| the Lease and its interest therein and that Assignor has not previously assigned or transferred, and |
| is not otherwise obligated to assign or transfer, any of its interest in the Lease or the Premises |
| demised thereby. |
| On a default by Assignor under the Lease or under that certain Franchise Agreement with |
| an effective date of("Franchise Agreement") between Assignor and |
| Assignee for that certain Center located at the Premises, in the event of a default by Assignor under |
| any document or instrument securing the Franchise Agreement, or on expiration, termination or |
| non-renewal of the Franchise granted in the Franchise Agreement, Assignee will have the right |
| and is hereby empowered to take possession of the Premises demised by the Lease, expel Assignor |
| therefrom, and, in such event, Assignor will have no further right, title or interest in the Lease and |
| will remain liable to Assignee for all past due rents Assignee will be required to pay to Lessor to |
| effectuate the assignment contemplated hereunder. All provisions of the Franchise Agreement |
| remain enforceable, including but not limited to Subsection 16.F, irrespective of whether this |
| Collateral Assignment of Lease is fully executed, implemented or otherwise enforced. |
| Assignor agrees that it will not suffer or permit any surrender, termination, amendment or |
| modification of the Lease without Assignee's prior written consent. Throughout the term of the |
| Franchise, Assignor agrees that it will elect and exercise all options to extend the term of or renew |
| the Lease not less than 30 days before the last day that said option must be exercised, unless |
| Assignee otherwise agrees in writing. On Assignee's failure otherwise to agree in writing, and on |
| failure of Assignee to elect to extend or renew the Lease as aforesaid, Assignor hereby appoints |
| Assignee as its true and lawful attorney-in-fact to exercise such extension or renewal options in |
| the name, place and stead of Assignor for the sole purpose of effecting such extension or renewal. |
| ASSIGNOR: |
| Dated: |
| Dated: |
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Annex Brands includes a Collateral Assignment of Lease agreement. This agreement stipulates conditions under which Annex Brands, as the Assignee, can take possession of the premises. Specifically, if the franchisee (Assignor) defaults on the lease, the Franchise Agreement, or any instrument securing the Franchise Agreement, Annex Brands has the right to take possession of the premises. This also applies upon the expiration, termination, or non-renewal of the franchise.
In such cases, Annex Brands can expel the franchisee from the premises, and the franchisee will lose all rights to the lease. The franchisee remains liable for any past due rents that Annex Brands is required to pay to the Lessor to effectuate the assignment. The agreement also ensures that all provisions of the Franchise Agreement, including Subsection 16.F, remain enforceable regardless of whether the Collateral Assignment of Lease is fully executed or enforced.
Furthermore, the franchisee cannot surrender, terminate, amend, or modify the lease without Annex Brands' prior written consent. Throughout the franchise term, the franchisee must elect and exercise all options to extend or renew the lease at least 30 days before the option's deadline, unless Annex Brands agrees otherwise in writing. If the franchisee fails to do so, Annex Brands is appointed as the franchisee's attorney-in-fact to exercise such extension or renewal options.