In an Annex Brands franchise transfer, what outstanding payments must the franchisee make?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
quirements.
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- Franchisee must pay all royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees under this Agreement and all other agreements between Franchisee and Franchisor or any of its affiliates, expenses, equipment lease or rental payments and/or supplies payments, purchases from Franchisor and its affiliates, interest, late fees, or any other indebtedness to Franchisor or its affiliates. which are then due and unpaid.
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- To the extent such consent is required by the terms of the lease, the lessor of the Center must have consented to the assignment or sublease of the Center to the transferee.
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- Except as provided in this Agreement, in lieu of an initial fee, Franchisee or the transferee must pay Franchisor a transfer fee of 15% of the then-current non-discounted initial franchise fee for a standard Center. If Franchisee or transferee qualifies for the International Franchise Association's VetFran Program, a 25% discount will be applied to the transfer fee. In no event will more than one VetFran discount be applied to the transfer fee.
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- Except to the extent prohibited or restricted by applicable law, Franchisee and its owners must execute general releases, in forms satisfactory to Franchisor, of any and all claims against Franchisor and its affiliates and their respective officers, directors, employees, and agents. No sale, assignment, transfer, conveyance, encumbrance or gift of any interest in the Franchise or this Agreement will release Franchisee or any other party to the transfer from the obligations or covenants in this Agreement, unless there is a specific written release by Franchisor.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, a franchisee looking to transfer their franchise must satisfy several outstanding payment obligations. Specifically, the franchisee must pay all due and unpaid royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, and other fees outlined in the Franchise Agreement and any other agreements with Annex Brands or its affiliates. This also includes any outstanding expenses, equipment lease or rental payments, supplies payments, purchases from Annex Brands and its affiliates, interest, late fees, or any other form of debt owed to Annex Brands or its affiliates.
In addition to settling these outstanding debts, the franchisee or the transferee is responsible for paying a transfer fee. This fee is equivalent to 15% of the then-current, non-discounted initial franchise fee for a standard Annex Brands center. However, if either the franchisee or transferee qualifies for the International Franchise Association's VetFran Program, a 25% discount will be applied to this transfer fee, although only one VetFran discount can be applied. The transferee must also deposit $5,500 with Annex Brands for a new marketing program.
Furthermore, before or at the initial training, the transferee is obligated to pay the then-current software license transfer fees to Annex Brands, as specified in Attachment 6. The transferee must also transfer, purchase, or obtain any other required software and/or software licenses from approved suppliers to operate the computer systems and comply with the current computer specifications. If the franchisee uses Annex Brands' sales consultants to facilitate the transfer, the franchisee or transferee must reimburse Annex Brands for any commissions or sales compensation paid to those consultants. If the franchisee has any deposits with Annex Brands, these deposits will be transferred to the transferee's account as of the transfer closing date, and the franchisee may negotiate reimbursement for this amount from the transferee through the Escrow Agent as an adjustment to the sales price.