Does the Annex Brands lease need to contain terms reasonably acceptable to the franchisor?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
B. LEASE OR SUBLEASE OF PREMISES FOR THE CENTER. Franchisor has the right to approve the terms of the lease or sublease of the Center. Franchisee agrees to deliver a copy of the proposed lease or sublease to Franchisor for its approval at least 10 days prior to its execution by Franchisee, and to deliver a final, executed copy to Franchisor within 5 days after execution. Franchisee agrees that it will not execute a lease or sublease for the Center that has, for any reason, been disapproved by Franchisor. Franchisee acknowledges and agrees that Franchisor's approval of the terms of any lease or sublease will not constitute a warranty or representation of any kind, expressed or implied, relating to the economic terms of such lease or
sublease. A lease or sublease for the Center will be subject to a Collateral Assignment of Lease (Attachment 5), will contain such terms as are reasonably acceptable to Franchisor, and, at Franchisor's option, will contain substantially the following provisions:
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the lease or sublease for the Center must contain terms reasonably acceptable to Annex Brands. The franchisee must deliver a copy of the proposed lease or sublease to Annex Brands for approval at least 10 days before the franchisee signs it. The franchisee must also deliver a final, executed copy to Annex Brands within 5 days after signing. The franchisee cannot execute a lease or sublease for the Center that Annex Brands has disapproved.
This requirement gives Annex Brands significant control over the location of its franchises, ensuring that the lease terms align with their standards and protect their interests. It also allows Annex Brands to monitor the franchisee's lease obligations and step in to cure any defaults, as well as the right to enter the premises to remove any branding after the lease or franchise agreement ends.
For a prospective Annex Brands franchisee, this means they must factor in the time required for Annex Brands to review and approve the lease when negotiating with landlords. Failure to obtain approval from Annex Brands before executing a lease could result in a breach of the franchise agreement. The franchisee should also be aware that Annex Brands's approval of the lease terms does not constitute a warranty regarding the economic terms of the lease.