What payment methods must an Annex Brands franchisee authorize to Franchisor?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must authorize payment to Franchisor by automatic draft from Franchisee's designated bank account or otherwise establish a payment arrangement whereby Franchisor will be able to present a draft to Franchisee's financial institution and withdraw funds from Franchisee's bank account to pay royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees under this Agreement and all other agreements between Franchisee and Franchisor and/or its affiliates, expenses, equipment lease or rental payments and/or supplies payments, purchases from Franchisor and/or its affiliates, interest, late fees, or any other indebtedness to Franchisor or its affiliates.
Franchisee agrees to always keep sufficient funds in its designated account to ensure that any draft will be honored by its financial institution.
Franchisor may specify periodic amounts for regular transfer to its account, based on past reports of sales by Franchisee and Franchisor's reasonable expectations of amounts to become due from Franchisee.
Franchisee agrees to advise Franchisor in advance of any change in its financial institution or account.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, franchisees must authorize specific payment methods to the Franchisor for fees and other financial obligations. Specifically, the franchisee must authorize payment to Annex Brands by automatic draft from the franchisee's designated bank account. Alternatively, the franchisee can establish a payment arrangement that allows Annex Brands to present a draft to the franchisee's financial institution and withdraw funds from the franchisee's bank account.
This authorization covers various fees, including royalty fees, marketing fees, national convention participation deposits, technology services fees, and insurance premiums. It also extends to other agreements between the franchisee and Annex Brands or its affiliates, covering expenses, equipment lease or rental payments, supplies payments, purchases from Annex Brands or its affiliates, interest, late fees, and any other indebtedness.
The franchisee is responsible for maintaining sufficient funds in their designated account to ensure that all drafts are honored. Annex Brands may specify periodic amounts for regular transfer to its account, based on the franchisee's past sales reports and Annex Brands' reasonable expectations of amounts due. The franchisee must also inform Annex Brands in advance of any changes to their financial institution or account. This level of control over payments is common in franchising, as it ensures a consistent revenue stream for the franchisor and reduces the risk of late or missed payments.