What liability or obligation does Annex Brands have under the Collateral Assignment of Lease, and what is the exception?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns, transfers and sets over unto ANNEX BRANDS, INC., a California corporation ("Assignee"), all of Assignor's right, title and interest as tenant in, to and under that certain lease, a copy of which is attached hereto as Exhibit A (the "Lease"), respecting premises commonly known as (the "Premises"). This Assignment is for collateral purposes only and, except as specified herein, Assignee will have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment or the Lease unless Assignee will take possession of the Premises demised by the Lease pursuant to the terms hereof and will assume the obligations of Assignor thereunder.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the Collateral Assignment of Lease specifies that Annex Brands, as the assignee, generally has no liability or obligation arising from the assignment or the lease itself. However, this changes if Annex Brands takes possession of the premises.
If Annex Brands takes possession of the premises, they then assume the obligations of the franchisee (assignor) under the lease. This means Annex Brands would be responsible for fulfilling the terms of the lease, including rent payments and other responsibilities outlined in the lease agreement.
This provision protects Annex Brands from being automatically liable for the lease obligations of its franchisees unless it actively steps in to take over the physical location and assume the lease. For a prospective franchisee, this highlights the importance of understanding the conditions under which Annex Brands might take possession of the premises, as it directly relates to the franchisee's own obligations and potential liabilities.