Does Annex Brands require collateral to support accounts receivable from its franchisees?

According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands generally does not require collateral to support accounts receivable from its franchisees. The FDD states that while Annex Brands performs credit evaluations of its franchisees, it typically does not mandate collateral to secure these accounts. This indicates that Annex Brands relies on the creditworthiness of its franchisees and the geographically diverse nature of its customer base to mitigate credit risk.

This policy could be advantageous for franchisees, as it reduces the burden of providing additional security to cover potential debts. Instead of requiring collateral, Annex Brands manages credit risk by evaluating franchisees' credit and relying on a broad customer base. This approach suggests that Annex Brands has confidence in its franchisees' ability to manage their finances and meet their obligations.

However, it's important to note that while collateral is generally not required, Annex Brands does perform credit evaluations. This implies that in some cases, based on the franchisee's credit history or other factors, Annex Brands might make exceptions to this general policy. Prospective franchisees should clarify the specific credit evaluation criteria and any potential circumstances where collateral might be requested to fully understand their financial obligations and potential risks.