Is an Annex Brands franchisee required to participate in all marketing fund programs?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and acknowledges that the Fund is intended to maximize general recognition and patronage of the Marks and Centers for the benefit of Franchisor and all Centers. Franchisee agrees to participate in all Fund programs. Franchisee has the right to set its own prices, except that Franchisee agrees to honor fully all coupons, price-reduction promotions and other promotions/programs as directed by Franchisor. Franchisor undertakes no obligation in developing, implementing, or administering marketing or public relations programs to ensure that expenditures which are proportionate or equivalent to contributions from Centers in any geographic area are made for that area. Franchisor assumes no direct or indirect liability or obligation to Franchisee with respect to the maintenance, direction, or administration of the Fund except as expressly provided in this Agreement.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, franchisees are required to participate in all marketing fund programs. The purpose of the marketing fund is to maximize recognition of the Annex Brands marks and centers. Franchisees must adhere to all coupons, price-reduction promotions, and other promotions as directed by Annex Brands. However, Annex Brands is not obligated to ensure that marketing expenditures are proportionate to contributions from centers in any specific geographic area. Annex Brands also assumes no direct liability to the franchisee regarding the fund's maintenance, direction, or administration, except as expressly provided in the franchise agreement.
Annex Brands may also establish a Matching Funds Advertising Program, where Advertising Associations to which a franchisee belongs can apply for funds. In addition to these potential matching funds, franchisees are expected to allocate additional funds for their own local center marketing and advertising efforts. This suggests that while franchisees must participate in the main marketing fund, they also have some responsibility for local marketing initiatives.
Furthermore, Annex Brands may require franchisees to participate in sales fulfillment programs related to strategic marketing alliances with other companies, potentially including Annex Brands' affiliates. These programs may involve online services, and franchisees must service orders according to the terms offered through these programs. Annex Brands or the program supplier may also charge franchisees a reasonable fee for business generated through these alliances. Additionally, franchisees are required to participate in any in-Center TV marketing program established by Annex Brands, which includes purchasing a TV and potentially additional equipment, as well as paying a monthly fee, currently at $17 per month, subject to change with 15 days' notice.