Can an Annex Brands franchisee indirectly compete through an Immediate Family Member after the transfer, expiration, termination, or non-renewal of the franchise?
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, a franchisee is restricted from engaging in competitive activities either directly or indirectly through an Immediate Family Member during the franchise term and for a period of two years after the transfer, expiration, termination, or non-renewal of the franchise. This restriction applies to being involved in any capacity (employee, manager, consultant, etc.) with a business offering similar services such as business support, mailbox rental, postal services, printing, packaging, and shipping.
The non-compete clause prevents a former Annex Brands franchisee (or their Immediate Family Member) from having an interest in a competitive business within a 5-mile radius of the original Center or any other Annex Brands Center in operation or under construction at the time of the franchise's conclusion. The franchisee is also prohibited from diverting or attempting to divert any business or customers from the Center to a competitive business. This is designed to protect Annex Brands' market share and goodwill by preventing former franchisees from leveraging their knowledge and relationships gained during the franchise term to unfairly compete.
Furthermore, if a franchisee transfers their franchise, the transferring owner must sign a non-competition covenant agreeing not to engage in a competitive business within a 5-mile radius of the Center for at least two years. This covenant also extends to indirect involvement through an Immediate Family Member. These measures ensure that neither the former franchisee nor their close relatives can undermine the new franchisee's business or the Annex Brands system. Prospective franchisees should carefully consider these post-term restrictions and how they might impact future business opportunities.