What was the outcome of Annex Brands' motion to compel arbitration in the Siew May Seow case?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Siew May Seow v. Annex Brands, Inc., Case Number 2023-00027996-CU-FR-CTL , San Diego Superior Court. On June 30, 2023, our franchisee, Siew May Seow ("Plaintiff"), filed an action in San Diego Superior Court naming us as Defendant, and alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, false promise, and restitution. We received notice of the action on July 6, 2023. On July 27, 2023, Plaintiff filed an amended complaint to add a claim for conversion based on the same facts alleged in the original
complaint. In January 2023, Plaintiff had signed a franchise agreement granting her the right and obligation to open and operate a Postal Annex+ Center, and paid us an initial franchise fee of $29,950. Plaintiff asserts that she was unable to secure financing, and seeks a refund of the initial franchise fee, punitive damages, attorney fees and costs, and prejudgment interest. We filed a motion to compel arbitration, since the franchise agreement contains an arbitration provision. On April 5, 2024, the Court granted our motion and stayed Plaintiff's action. On May 29, 2024, Plaintiff filed a Demand for Arbitration (AAA, San Diego, California, Case No. 01-24-0005-7170). As of the date of this disclosure document, an arbitration hearing was scheduled to occur on March 19, 2025. We deny that Plaintiff is entitled to any relief, and we intend to defend against Plaintiffs' claims on their merits.
Source: Item 3 — Litigation (FDD pages 16–17)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Siew May Seow, an Annex Brands franchisee, filed an action against Annex Brands in San Diego Superior Court on June 30, 2023, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, false promise, and restitution. The franchisee amended the complaint on July 27, 2023, to include a claim for conversion. The franchisee sought a refund of the initial franchise fee of $29,950, punitive damages, attorney fees and costs, and prejudgment interest, claiming she was unable to secure financing after signing a franchise agreement in January 2023.
Annex Brands responded by filing a motion to compel arbitration, citing the arbitration provision in the franchise agreement. The Court granted Annex Brands' motion on April 5, 2024, and stayed the franchisee's action. Subsequently, on May 29, 2024, the franchisee filed a Demand for Arbitration. As of the date of the 2025 disclosure document, an arbitration hearing was scheduled for March 19, 2025. Annex Brands denies that the franchisee is entitled to any relief and intends to defend against the claims on their merits.
This indicates that Annex Brands prefers to resolve disputes through arbitration rather than court litigation, a common practice in franchising to maintain consistency and potentially reduce costs. The ultimate outcome of the arbitration is not disclosed in this document, but the fact that it was proceeding to a hearing suggests that the dispute was not easily resolved. A prospective franchisee should be aware of the arbitration clause in the franchise agreement and understand that any disputes with Annex Brands may be subject to arbitration.