If a provision of the Annex Brands agreement is essential, what happens if it 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only in such jurisdiction, unless Franchisor elects to give them greater applicability, and will be enforced as originally made and entered into in all other jurisdictions.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 Annex Brands Franchise Disclosure Document, the agreement contains a severability clause. This means that if a part of the agreement is deemed invalid by a court, arbitrator, agency, or tribunal with jurisdiction, the remaining parts of the agreement will still be valid and enforceable. The ruling against a specific section will not impact the other sections of the agreement, allowing them to remain in full effect.
However, the specific part that is ruled invalid will be removed from the agreement. This removal is effective from the date the appeal period expires if the franchisee is involved in the ruling. Otherwise, the removal is effective upon the franchisee receiving written notice from Annex Brands that the specific section will not be enforced.
Furthermore, the franchisee agrees to adhere to the maximum duty permitted by law, even if it requires modifying or reducing the scope of any promise or covenant within the agreement. These modifications are only applicable in the jurisdiction where the ruling was made, unless Annex Brands decides to apply them more broadly. In other jurisdictions, the original agreement will remain in effect.