What happens if the Assignor defaults under the Franchise Agreement with Annex Brands?
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. |
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| 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. |
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, if an Annex Brands franchisee (the Assignor) defaults under the Franchise Agreement, the lease, or any document securing the Franchise Agreement, Annex Brands (the Assignee) has the right to take possession of the premises. This also applies if the franchise is terminated, expires, or is not renewed.
Specifically, Annex Brands is empowered to enter the premises, expel the franchisee, and the franchisee will lose all rights to the lease. The franchisee will remain liable to Annex Brands for any past due rents that Annex Brands is required to pay to the Lessor to effectuate the assignment.
The FDD specifies that all provisions of the Franchise Agreement remain enforceable, including Subsection 16.F, regardless of whether the Collateral Assignment of Lease is fully executed, implemented, or enforced. This means that even with the lease assignment, the franchisee is still bound by the terms of the Franchise Agreement.