Regarding the transfer or assignment of an Annex Brands franchise, what is the requirement for the person assuming the obligations under the franchise agreement?

According to Annex Brands's 2025 Franchise Disclosure Document, specifically the North Dakota state addendum, a transfer or assignment of the franchise can only be made to someone who, in Annex Brands's good faith judgment, is willing and able to assume the obligations under the franchise agreement. This means that if a franchisee wants to sell or transfer their franchise to another party, Annex Brands has the right to assess whether that potential new franchisee is capable of fulfilling the responsibilities outlined in the original franchise agreement.

This requirement protects Annex Brands by ensuring that any new franchisee taking over an existing location is qualified to maintain the standards and obligations of the franchise system. It also implies that Annex Brands has the authority to reject a potential transferee if they do not meet the franchisor's criteria for competence and willingness to adhere to the franchise agreement.

For a prospective Annex Brands franchisee, this highlights the importance of understanding all obligations within the franchise agreement before seeking a transfer. If they plan to sell their franchise in the future, they should be aware that the potential buyer's acceptance is not solely based on their willingness to pay, but also on Annex Brands's approval of their ability to manage the franchise effectively. This clause is fairly standard in franchising, as franchisors want to ensure brand consistency and protect their overall network.