To what indebtedness can Annex Brands apply payments from a franchisee?

According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands has the sole discretion to apply any payments made by the franchisee, as well as any credits received on the franchisee's behalf from third-party vendors or suppliers, towards the franchisee's outstanding debts. These debts can include royalty fees, marketing fees, national convention participation deposits, technology services fees, and insurance premiums. These fees are outlined in the Franchise Agreement and any other agreements between the franchisee and Annex Brands or its affiliates.

Furthermore, Annex Brands can apply payments to cover expenses, equipment lease or rental payments, supplies payments, and purchases made from Annex Brands or its affiliates. The payments can also be applied to cover interest, late fees, or any other form of indebtedness owed to Annex Brands or its affiliates. This wide range of application provides Annex Brands with significant flexibility in managing franchisee accounts and ensuring that all outstanding obligations are addressed.

This policy means that if a franchisee has multiple outstanding debts to Annex Brands, Annex Brands can choose which debts to prioritize with any payment received. Franchisees need to be aware of this and communicate clearly with Annex Brands regarding how they want their payments to be applied, although the final decision rests with Annex Brands. This clause protects Annex Brands' financial interests by allowing them to manage and recover outstanding debts efficiently.