What happens if a provision of the Annex Brands agreement is deemed invalid?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
17. ENFORCEMENT
A. SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS. Except as expressly provided to the contrary in this Agreement, each Section, Subsection and provision of this Agreement, and any portion thereof, will be considered severable and if, for any reason, any such part of this Agreement is held to be invalid, contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, arbitrator, agency or tribunal with competent jurisdiction in a proceeding to which Franchisor is a party, that ruling will not impair the operation of, or have any other effect upon, such other parts of this Agreement as may remain otherwise intelligible, which will continue to be given full force and effect and bind the parties hereto, although any part held to be invalid will be deemed not to be a part of this Agreement from the date the time for appeal expires, if Franchisee is a party thereto, otherwise upon Franchisee's receipt of a written notice of non-enforcement thereof from Franchisor.
Franchisee agrees to be bound by any promise or covenant imposing the maximum duty permitted by law which is subsumed within any provision of this Agreement, as though it were separately articulated in and made a part of this Agreement, that may result from striking from any of the provisions of this Agreement, or any specification, standard or operating procedure prescribed by Franchisor, any portion or portions which a court or arbitrator may hold to be unenforceable in a final decision to which Franchisor is a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court or arbitration order. Such modifications to this Agreement will be effective only in such jurisdiction, unless Franchisor elects to give them greater applicability, and will be enforced as originally made and entered into in all other jurisdictions.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands includes a severability clause in its franchise agreement. This means that if a court, arbitrator, agency, or tribunal issues a final, unappealable ruling that any part of the agreement is invalid or conflicts with applicable law, the remaining parts of the agreement will still be considered valid and enforceable. The ruling will only affect the specific part deemed invalid, ensuring that the rest of the agreement remains in effect.
If the franchisee is a party to the ruling, the invalid part of the agreement will be considered void from the date the appeal period expires. Otherwise, it becomes void upon the franchisee receiving written notice from Annex Brands that the specific clause will not be enforced. This ensures that franchisees are promptly informed of any changes to their contractual obligations.
Furthermore, the franchisee agrees to be bound by a promise or covenant imposing the maximum duty permitted by law, which is subsumed within any provision of the agreement. This may result from striking portions of the agreement deemed unenforceable or reducing the scope of any promise or covenant to comply with a court or arbitration order. These modifications are effective only in the specific jurisdiction unless Annex Brands decides to apply them more broadly, and the original agreement will be enforced in all other jurisdictions. This clause aims to maintain the enforceability of the agreement to the fullest extent possible, adapting to legal requirements while preserving the overall intent of the contract.