After the lessee's cure period expires, what rights does Annex Brands have regarding the lease?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
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- "Lessor will give written notice to Franchisor, or its successor, concurrently with the giving of such notice to Lessee, of any default by Lessee under the Lease, and Franchisor or its successor will have, after the expiration of the period during which the Lessee may cure such default, an additional 15 days to cure, in its sole discretion, any such default. Such notice will be sent to Annex Brands, Inc., Attention: Patrick F. Edd, CEO and President, 7580 Metropolitan Drive, Suite 200, San Diego, CA 92108, or such other address as Franchisor may periodically specify in writing to Lessor".
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- "Lessor hereby agrees that, after the expiration, termination or non-renewal of this Lease, or of the Franchise between Lessee and Franchisor or its successor, Franchisor, or its successor or designee, may enter upon the leased premises for the purpose of removing all signs and other material bearing the trademarks, service marks or other commercial symbols of Franchisor or its successor".
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands, as the franchisor, has specific rights regarding the lease of the franchisee's business premises after the franchisee's cure period expires. The lessor is required to provide written notice to Annex Brands concurrently with the notice given to the franchisee (lessee) regarding any default under the lease. Following the expiration of the franchisee's cure period, Annex Brands has an additional 15 days, at its discretion, to cure the default. This allows Annex Brands to protect its interests and maintain the continuity of the franchise location. The notice should be sent to Annex Brands, Inc., Attention: Patrick F. Edd, CEO and President, at a specified address, or another address that Annex Brands may specify.
Additionally, the lessor agrees that after the lease's expiration, termination, or non-renewal, or the termination of the franchise agreement, Annex Brands has the right to enter the leased premises to remove any signs and materials bearing Annex Brands' trademarks or commercial symbols. This provision ensures that the brand's identity is protected and that the franchisee does not continue to operate using Annex Brands' intellectual property after the agreement ends.
Furthermore, Annex Brands is granted rights through the Collateral Assignment of Lease. Upon a default by the franchisee under the lease or franchise agreement, Annex Brands has the power to take possession of the premises, expel the franchisee, and terminate the franchisee's rights to the lease. The franchisee remains liable for any past due rents that Annex Brands is required to pay to the lessor to effectuate the assignment. This collateral assignment provides Annex Brands with a strong mechanism to control the premises and ensure continued operation or proper closure of the franchise location.
In summary, these provisions in the lease and collateral assignment offer Annex Brands significant control and protection regarding the franchise location. They allow Annex Brands to cure defaults, maintain brand consistency, and ensure the orderly transition of the premises in case of termination or non-renewal of the franchise agreement. A prospective franchisee should understand these terms, as they outline the potential for Annex Brands to step in and take over the lease under certain circumstances.