For how long after the transfer, expiration, termination, or non-renewal of an Annex Brands franchise is the franchisee subject to a covenant not to compete?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
tion Covenants.
- a. For purposes of this Section 3, the word "Conclusion" means the expiration, termination, non-renewal or transfer of the Franchise under the Franchise Agreement, regardless of whether such expiration, termination, non-renewal or transfer occurs prior to, or at the end of, the Franchise's term.
- b. Upon the Conclusion of the Franchise under the Franchise Agreement, and in accordance with the time period and geographic restrictions set forth below, Covenantor will not directly or indirectly (such as through corporations or other entities controlled by Covenantor or by, through or in conjunction with, any other individual person or person, including but not limited to Covenantor's spouse if any, relatives, employees or business affiliates):
- i. divert or attempt to divert any business or customer of any Retail Center or Commercial Logistics Center to any competitor, or do anything injurious or prejudicial to the goodwill associated with ABI's Marks or System for a two
- (2) year period following the Conclusion of the Franchise under the Franchise Agreement and without geographic restriction;
- ii. own, maintain, engage in, be associated with, be employed by, advise, assist, invest in, be landlord to, franchise, make loans to, or have any interest in any business which is the same, competes, or is substantially similar to, Franchisee's Center or any Retail Center or Commercial Logistics Center, which is located within 5 miles of Franchisee's Center or any Retail Center or Commercial Logistics Center in operation or under construction as of the Conclusion of the Franchise under the Franchise Agreement (with such restriction limited to a two (2) year period following the Conclusion of the Franchise under the Franchise Agreement); and/or
- iii. enter into any business relationship with any terminated (former) Corporate Account(s) of any Retail Center or Commercial Logistics Center for a one (1) year period following ABI's termination of any of its Corporate Accounts.
- c.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, franchisees are subject to a non-compete covenant for a defined period after the conclusion of their franchise agreement, which includes transfer, expiration, termination, or non-renewal. This covenant restricts the franchisee from engaging in activities that could harm Annex Brands' business interests.
Specifically, a franchisee cannot divert business or customers from any Retail Center or Commercial Logistics Center to a competitor, nor can they do anything that damages the goodwill associated with Annex Brands' marks or system. This restriction is in place for two years following the conclusion of the franchise agreement and has no geographic limitations.
Additionally, for a period of two years after the end of the franchise, a franchisee is prohibited from owning, maintaining, or being involved with any business that competes with the Annex Brands franchise within a 5-mile radius of the former franchise location or any other Retail Center or Commercial Logistics Center in operation or under construction. There is also a one-year restriction on entering into business relationships with any terminated Corporate Accounts of any Retail Center or Commercial Logistics Center.
If a franchisee violates these non-compete agreements within the initial two-year period, they agree to comply with the covenant for a subsequent two-year period, and an arbitrator or judge can order compliance during any subsequent two-year period. The enforceability of these covenants is governed by the law of the jurisdiction where the Center is located, and Annex Brands can seek injunctive relief and recover costs and expenses, including attorney's fees, to enforce these covenants.