What happens if an Annex Brands franchisee sells their additional Center before 1 year of operation?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Center; or
- g) $5,000 if Franchisee already owns and operates at least 1 Center or 1 Commercial Logistics Center and this Agreement is for a standard Center or flex Center that will be converted from a qualifying existing business providing the same services to the public; provided that the Center must be operational within 365 days after this Agreement is signed and must be owned and operated by Franchisee for a minimum of 1 year thereafter; and provided further that if the Center is sold before the completion of 1 year of operation, Franchisee must pay to Franchisor the discounted amount of the initial franchise fee ($30,000) upon sale of the Center; or
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- Initial Franchise Fee for an Express Center. If this Agreement is for an express Center, Franchisee will pay to Franchisor an initial franchise fee of $17,500, or $13,125 if the Franchisee qualifies for the VetFran discount; provided that the Center must be operational within 365 days after this Agreement is signed and must be owned and operated by Franchisee for a minimum of 1 year thereafter; and provided further that if the Center is sold before the completion of 1 year of operation, Franchisee must pay to Franchisor the discounted amount of the initial franchise fee ($4,375) upon sale of
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, if an Annex Brands franchisee sells a standard or flex Center before operating it for at least one year, they must pay Annex Brands the discounted amount of the initial franchise fee. The initial franchise fee is $30,000, and the discounted fee is $5,000. This applies if the franchisee already owns and operates at least one other Center or one Commercial Logistics Center, and the new Center is a converted business providing the same services. The Center must be operational within 365 days after the Franchise Agreement is signed.
For an Express Center, the initial franchise fee is $17,500, or $13,125 if the franchisee qualifies for the VetFran discount. If the Express Center is sold before one year of operation, the franchisee must pay Annex Brands the discounted amount of the initial franchise fee, which is $4,375.
This policy ensures that Annex Brands recoups some of the initial franchise fee if a franchisee does not operate the business for a reasonable period. It also incentivizes franchisees to commit to the long-term operation of their Centers. Prospective franchisees should consider this clause carefully, especially if they anticipate needing to sell the Center within the first year of operation.