If an Annex Brands franchisee intentionally makes a material misrepresentation on their franchise application, can the franchise be terminated?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. TERMINATION WITHOUT OPPORTUNITY TO CURE. Franchisor may, in its sole discretion, terminate the Franchise, effective upon giving written notice of termination to Franchisee, if Franchisee or any of its owners:
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- has intentionally made any material misrepresentation or omission in connection with his, her or their application for the Franchise;
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Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands has the right to terminate a franchise agreement without the opportunity to cure if a franchisee intentionally makes a material misrepresentation or omission in their franchise application. This means that if Annex Brands discovers that a franchisee provided false or misleading information that was significant to the franchise approval process, Annex Brands can terminate the agreement immediately upon written notice.
This provision protects Annex Brands from franchisees who might try to deceive them to obtain a franchise. Material misrepresentations could include exaggerating financial resources, concealing a criminal history, or misrepresenting business experience. The materiality aspect means the misrepresentation must be significant enough to have influenced Annex Brands' decision to award the franchise.
For a prospective Annex Brands franchisee, this underscores the importance of honesty and accuracy when completing the franchise application. Any intentional misstatement, even if seemingly minor, could lead to termination without a chance to correct the issue. Franchisees should carefully review their application and supporting documents to ensure all information is truthful and complete. This termination clause is relatively standard in franchise agreements, as franchisors need to rely on the information provided by potential franchisees to make informed decisions.