Can I purchase or lease equipment and supplies from any source for my Annex Brands franchise?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must purchase or lease equipment, supplies (including packaging materials, labels and forms), services (such as FedEx, UPS and DHL shipping services), furniture, interior and exterior signage, computer hardware, and software programs and licenses, in accordance with our
specifications. Also, you must purchase or lease these items in amounts that we recommend, based on our experience in the business, and to provide you proper planning, training and record keeping. Except as otherwise stated in this disclosure document, in our Manuals, in writing or otherwise, you may purchase or lease these items from any source. There are no approved suppliers in which any of our officers owns an interest.
You must use a contractor and an architect that we designate in the build-out of your retail center. The contractor will coordinate with the architect, design and plan the premises, interact with local officials for appropriate building approvals, and complete the build-out of the premises (including electrical, painting, equipment package installation for your retail center, and also possibly including interior and exterior signage installation). The architect will design the premises of your retail center according to our specifications and prepare plans that meet local requirements. You may use a substitute licensed contractor if we approve the licensed contractor in advance. It is not our regular practice to approve substitute contractors. The factors we consider to approve or disapprove a substitute contractor are licensing experience, commercial tenant improvement experience, pricing, reputation and scheduling availability. If we approve and you use a substitute contractor, you must pay us a $2,500 construction consultation fee before construction begins. You may not use a substitute architect.
We may reject a proposed site for your franchised facility. We will consider factors such as visibility and accessibility, appearance, parking, size, layout, length of availability, and the terms of any proposed lease or sublease.
To ensure adequate insurance coverage, Subsection 9.I of the franchise agreement requires you to obtain and maintain in force, at your sole expense, under policies of insurance issued by carriers with no less than a Best's rating of A, the following:
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- Comprehensive general, public, and product liability insurance, against claims for bodily and personal injury, death, and property damage caused by or occurring in conjunction with the operation of your retail center or otherwise in conjunction with your conduct of business under the franchise agreement, under 1 or more policies of insurance containing a minimum of $2,000,000 per occurrence and $4,000,000 aggregate liability coverage.
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- Notary professional liability insurance of at least $500,000 or the maximum permitted by the state if less than $500,000.
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- Property insurance against any claims at your retail center included within the classification "Causes of Loss – Special Form," including vandalism, malicious mischief and theft. The coverage must be in an amount not less than 100% of the actual replacement cost of your retail center, and also must include property of others in your care, custody or control with a minimum limit of $400,000, and employee dishonesty coverage with a minimum limit of $25,000.
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- Business interruption coverage on an "actual loss sustained" basis for a period of not less than 24 months or the maximum permitted by the state if less than 24 months.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 39–43)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, franchisees generally have the option to purchase or lease equipment, supplies, and services from any source, provided they meet Annex Brands' specifications. However, there are several exceptions where franchisees are required to use specific, approved suppliers.
Annex Brands mandates that franchisees obtain the PostalMate POS network software, related updates, and enhancements exclusively from them. Similarly, the equipment package for the retail center, including fixtures, mailboxes, package lockers, and flooring, must be sourced solely from Annex Brands. Franchisees are also required to use ScreenCloud Limited for the ScreenCloud web-based software and Amazon.com, Inc. for the device needed for the in-Center TV marketing program. Additionally, the web-based financial training portal, licensed from Profit Soup LLC, must be obtained through Annex Brands as the sole approved supplier.
For the build-out of the retail center, Annex Brands requires the use of a designated contractor and architect, although a substitute licensed contractor may be approved under certain conditions, incurring a $2,500 construction consultation fee. Furthermore, franchisees must adhere to Annex Brands' specifications and recommended amounts for various items, including packaging materials, labels, forms, shipping services (FedEx, UPS, and DHL), furniture, signage, computer hardware, and software programs. Logo attire must be purchased from approved suppliers, with the possibility of requesting approval for additional suppliers, subject to Annex Brands' evaluation of their prices, quality, and ability to meet standards. Franchisees are also obligated to participate in Annex Brands' sponsored insurance program for small parcel, freight, or transit damage and the international ocean program, with Annex Brands retaining a portion of the ocean charges to cover administrative costs.
In summary, while Annex Brands allows some flexibility in sourcing equipment and supplies, it imposes significant restrictions by designating specific suppliers for critical components and services. Prospective franchisees should carefully review these requirements and consider the potential impact on their operational costs and supplier relationships.