Are the personnel of an Annex Brands franchisee considered employees of the franchisor?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
afe manner.
- c) Franchisee is solely responsible for recruiting, interviewing, hiring, determining the terms of employment of, compensating, keeping the time of, processing the payroll of, providing work resources to, scheduling, supervising, disciplining and firing Franchisee's personnel. Franchisee's personnel are not Franchisor's employees, independent contractors or agents. Franchisor has no right or duty to supervise, or to exercise control over, Franchisee's personnel in the operation of the Center, and disclaims any rights or responsibilities as to Franchisee's personnel. To the extent that Franchisor provides Franchisee with guidelines, recommendations, materials and other resources related to functions such as recruiting, interviewing, hiring, determining the terms of employment of, compensating, keeping the time of, processing the payroll of, providing work resources to, scheduling, supervising, disciplining or firing personnel, Franchisee may use those resources, or may choose to use alternate resources.
Franchisee is solely responsible for consulting with its own third-party human resources ("HR") service provider and/or legal counsel concerning compliance with all applicable personnel laws and regulations, and for complying with those laws and regulations.
- d) Franchisee is solely responsible for establishing and enforcing its own policies related to personnel practices and labor relations. To the extent that Franchisor provides Franchisee with guidelines, recommendations and materials related to personnel practices and labor relations, Franchisee may use those resources, or may choose to use alternate resources. Franchisee is solely responsible for consulting with its own third-party HR service provider and/or legal counsel concerning compliance with applicable personnel and labor relations laws and regulations, and for complying with those laws and regulations.
- During the term of the Franchise, Franchisee will hold itself out, to the public, public officials, its suppliers, its independent contractors and others, as an independent contractor operating the Center pursuant to rights granted by Franchisor, but not jointly with Franchisor. Franchisee will take any reasonable action that Franchisor considers necessary to that end, including exhibiting notices of the parties' relationship in a conspicuous manner at the Center, and on websites, letterhead, forms, business cards, electronic communications, advertisements and other materials Franchisor designates. At Franchisor's request, Franchisee will prominently display a "Franchises Available" notice at a place or places in the Center that Franchisor designates. Franchisor reserves the right to specify and change the content and form of these notices.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the personnel of a franchisee are not considered employees of the franchisor. The franchisee is explicitly responsible for all aspects of their employees' employment, including recruiting, hiring, determining terms, compensation, payroll, and discipline. Annex Brands has no right or duty to supervise or control the franchisee's personnel and disclaims any rights or responsibilities regarding them.
To ensure clarity, Annex Brands requires franchisees to present themselves as independent contractors to prospective and current employees. This includes stating on employment applications that the applicant is applying to be the franchisee's employee, using the franchisee's full business name on payroll checks, and requiring employees to sign acknowledgements confirming they are not employees of Annex Brands. Annex Brands reserves the right to specify and change the content and form of these statements and acknowledgements.
Annex Brands may provide franchisees with guidelines, recommendations, and materials related to personnel matters. However, the franchisee can choose to use these resources or opt for alternate resources. The franchisee is ultimately responsible for consulting with their own HR service provider or legal counsel to ensure compliance with all applicable personnel laws and regulations. This arrangement is typical in franchising, where franchisees operate as independent business owners and are responsible for their own staffing and employment practices.