Regarding successors-in-interest and assigns, does the Annex Brands agreement inure to their benefit?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| As an inducement to Annex Brands, Inc., a California corporation ("Franchisor"), to enter into that certain franchise agreement with an effective date of ("Agreement") by and between Franchisor and |
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| ("Franchisee"), I/we, as personal guarantor(s) (each a "Guarantor"), jointly and severally, |
| absolutely and unequivocally, personally guarantee the performance by Franchisee of all |
| obligations of Franchisee to Franchisor under, or arising out of, the Agreement, and all other |
| agreements signed between Franchisor or any of Franchisor's affiliates ("Other Agreements"), and |
| agree to perform those obligations should Franchisee be unable to perform. The obligations |
| assumed under this Continuing Personal Guarantee are not transferable. |
| Should the time or manner of payment of any amounts owed by Franchisee to Franchisor |
| or any of Franchisor's affiliates change or should any obligation of Franchisee to Franchisor or |
| any of Franchisor's affiliates be modified, such action will not affect the liabilities of Guarantor in |
| any manner. |
| Guarantor agrees to become bound by, and participate in, any judicial proceedings or |
| arbitration proceedings brought by Franchisor or any of Franchisor's affiliates to enforce the |
| Agreement or Other Agreements and this Continuing Personal Guarantee. |
| Guarantor will pay reasonable attorneys' fees and all other costs and expenses, which may |
| be incurred by Franchisor or any of Franchisor's affiliates through appeal in the enforcement of |
| this Continuing Personal Guarantee. |
| This is a continuing personal guarantee and it will remain in full force until all obligations |
| of Franchisee to Franchisor under the Agreement or Other Agreements are fully performed. |
| Should any one or more provisions of this Continuing Personal Guarantee be determined |
| to be illegal or unenforceable, all other provisions will nevertheless remain effective. |
| This Continuing Personal Guarantee will inure to the benefit of Franchisor, its affiliates, |
| its successors and assigns, and is intended to bind Guarantor and his/her/their heirs, executors, |
| administrators, successors and assign |
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the Continuing Personal Guarantee associated with the franchise agreement inures to the benefit of Annex Brands, its affiliates, successors, and assigns. This means that the guarantee extends not only to Annex Brands itself but also to any entity that acquires Annex Brands or its rights. This guarantee is also intended to bind the guarantor and their heirs, executors, administrators, successors, and assigns, ensuring that the obligations under the guarantee continue even in the event of the guarantor's death or transfer of assets.
This provision is typical in franchising, as it protects the franchisor's interests in the event of a transfer of ownership or other changes in the business structure. It ensures that the financial obligations of the franchisee are secured, regardless of who owns or operates the franchise. The guarantor cannot transfer their obligations under the guarantee.
For a prospective Annex Brands franchisee, this means that if a personal guarantee is required as part of the franchise agreement, the obligations under that guarantee will extend to Annex Brands's successors and assigns. Additionally, the guarantor's estate and heirs may be responsible for fulfilling the guarantee. It is important for potential franchisees and their guarantors to fully understand the implications of this provision and to seek legal advice if necessary.