If Annex Brands establishes co-branding programs, what is a franchisee required to do?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding other provisions in this Agreement, Franchisor reserves the right to establish relationships, partnerships, joint ventures, and other strategic alliances (collectively, "programs") with suppliers, retailers, service providers, and other franchise or distribution companies (collectively, "companies"), in which the products or services of those companies will be co-marketed with Franchisor's products and services, which may entail the promotion of the "brands" of those companies' products or services and the license of those companies' marks. If Franchisor establishes any programs of this type, Franchisee must participate in accordance with policies and requirements that Franchisor establishes, including the execution of separate licensing and distribution agreements in forms that Franchisor specifies, and the payment of reasonable fees related to the programs that may be in addition to royalty fees and marketing fees.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, if Annex Brands establishes co-branding programs, franchisees must participate according to the policies and requirements Annex Brands establishes. This includes executing separate licensing and distribution agreements in forms that Annex Brands specifies. Franchisees must also pay reasonable fees related to the programs, which may be in addition to royalty and marketing fees.
This means that if Annex Brands decides to partner with other companies to co-market products or services, franchisees are obligated to take part in these programs. This participation extends to adhering to the guidelines set by Annex Brands, signing any necessary agreements, and paying any associated fees. These fees could potentially increase the franchisee's financial obligations beyond the standard royalty and marketing fees.
For a prospective Annex Brands franchisee, this implies a need to be flexible and adaptable to potential co-branding initiatives. It is important to understand that participation in these programs is mandatory and can involve additional costs. Therefore, a franchisee should inquire about the potential frequency and financial implications of such programs to accurately assess the overall investment and operational costs.