Does the post-termination non-compete restriction for Annex Brands employees apply regardless of the reason for termination?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) For 1 year after termination of your engagement or employment, regardless of the cause of termination, you will not, without the written consent of us and Franchisor, directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any other person or entity, own, maintain, engage in, have any interest in or perform any service for any business that offers, or that franchises or licenses others to offer, products or services that are the same as or substantially similar to the products or services that were or could have been offered by us or Franchisor when you were engaged or employed, and that operates: (1) within our Protected Area, or (2) within the Protected Area of any other franchisee's Franchised Business operating at the time of termination.
-
Reduction in Scope of Covenant.
You agree that we or Franchisor may, in our sole discretion, reduce (but never increase) the scope of any term or subpart of any term in this Agreement without your consent, effective immediately on written notice from us or Franchisor, and you agree that you will promptly comply with any term or subpart so modified, that will be fully enforceable notwithstanding any other term or subpart of this Agreement.
Covenants As Independent and As Conditions Precedent to Employment or Engagement.
Your covenants in Section 1 are independent of any other terms of this Agreement, and are conditions precedent to engagement or employment.
Any claim or cause of action against us or Franchisor, whether predicated on this Agreement or otherwise, will not be a defense to t
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, the post-termination non-compete agreement for employees is applicable regardless of the reason for termination. Specifically, for one year after the termination of employment or engagement, the employee cannot, without written consent from both the franchisee and Annex Brands, be involved with any business offering similar products or services to those offered by the Annex Brands franchise. This restriction applies if the business operates within the franchisee's protected area or within the protected area of any other Annex Brands franchisee at the time of termination.
This non-compete clause prevents a former employee from leveraging knowledge and experience gained while working at the Annex Brands location to directly compete with the franchise. The restriction is limited to one year and to the specific geographic areas of the protected territories, which aims to protect the franchisee's customer base and market share.
Annex Brands or the franchisee can reduce the scope of any term within the agreement with written notice, but they cannot increase it. This provides some flexibility to adjust the restrictions based on specific circumstances. The agreement also states that any claim against the franchisee or Annex Brands does not serve as a defense against the enforcement of these covenants. This ensures that the non-compete obligations remain in effect regardless of any disputes that may arise.