What was the Matter Number associated with the Assurance of Discontinuance between Annex Brands and the State of Washington?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Item 3 of this disclosure document is modified to include the following disclosure:
Annex Brands, Inc. Assurance of Discontinuance, Matter No. 19-2-26209-5 SEA, State of Washington, King County Superior Court. On October 7, 2019, we entered into an Assurance of Discontinuance ("AOD") with the State of Washington Office of Attorney General ("OAG"). The OAG had investigated us, as it is investigating all franchisors with State of Washington registrations, regarding the inclusion by franchisors of no-poaching provisions in their franchise agreements and the enforcement by franchisors of those provisions. No-poaching provisions in franchise agreements restrict franchisees from soliciting or hiring workers from the franchisor or other franchisees. The OAG alleges that no-poaching provisions are in restraint of trade and violate the State of Washington Consumer Protection Act. Before the OAG investigated us, we had voluntarily removed nopoaching provisions from our franchise agreements, and we had not enforced those provisions. Nevertheless, to avoid protracted and expensive litigation, and while expressly denying any violation of law, we entered into the AOD, which required us to: (a) refrain from including no-poaching provisions in future franchise agreements nationwide; (b) refrain from enforcing no-poaching provisions nationwide; (c) notify our franchisees of the AOD; (d) seek to amend all then-existing franchise agreements in the State of Washington to remove any no-poaching provisions; and (e) remove no-poaching provisions in thenexisting franchise agreements nationwide as they are renewed or renegotiated. We complied with, and are complying with, the AOD.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the Assurance of Discontinuance (AOD) with the State of Washington Office of Attorney General is associated with Matter Number 19-2-26209-5 SEA. This AOD resulted from an investigation by the OAG into no-poaching provisions within franchise agreements, a common area of scrutiny for franchisors registered in Washington.
The OAG's concern was that these no-poaching clauses, which restrict franchisees from hiring employees from Annex Brands or other franchisees, could violate the State of Washington Consumer Protection Act. Although Annex Brands had already removed these provisions and had not enforced them, they entered into the AOD to avoid prolonged litigation.
As part of the AOD, Annex Brands agreed to several actions, including refraining from using no-poaching provisions in future agreements nationwide, ceasing enforcement of existing provisions, notifying franchisees about the AOD, and amending franchise agreements in Washington to remove these clauses. They also committed to removing no-poaching provisions from existing agreements nationwide as they were renewed or renegotiated. This demonstrates Annex Brands' willingness to cooperate with regulatory bodies and adapt its franchise agreements to comply with state laws.
For a prospective franchisee, this indicates that Annex Brands is proactive in addressing legal concerns and ensuring compliance with state regulations, particularly those related to employee solicitation and hiring practices. Franchisees should be aware of these stipulations, especially if they plan to operate in Washington, and understand how these changes may affect their ability to recruit and retain employees.