Can Annex Brands require franchisees to purchase certain items directly from them or their affiliates?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
D SERVICES. The presentation of a uniform image to the public and the resulting positive reputation and goodwill are essential elements of a successful franchise system. Franchisee therefore agrees that the Center will offer for sale such products, services, and will use those brands and models of equipment as Franchisor, in its sole discretion, periodically determines to be appropriate for Centers.
In determining approved brands and models of equipment, Franchisor may consider standards of quality, value, customer recognition and acceptance, advertising support and availability, and such other standards as are periodically determined by Franchisor to be relevant. Certain trade dress fixtures, equipment, supplies, other merchandise and services may be required to be purchased directly from Franchisor and/or its affiliates, or may be permitted to be purchased from other suppliers provided Franchisor is held harmless by Franchisee regarding any products liability cause of action. On items or services sold by Franchisor and/or its affiliates, Franchisor anticipates a reasonable profit to cover overhead expenses.
Franchisor may periodically publish a suggested price list for products and services offered at the Center. The purpose of such a list is for guidance only. Franchisee is not bound by these suggested prices and may offer products and services at prices determined at the sole discretion of Franchisee, except as otherwise noted in Subsections 9.J, 9.K, 10.A and 10.F of this Agreement.
If Franchisee desires to use any type, brand, or model of equipment which is not then currently approved by Franchisor, or if Franchisee desires to purchase any equipment from a supplier other than Franchisor, an affiliate of Franchisor or a supplier which is then currently approved by Franchisor for such equipment, Franchisee will notify Franchisor of his, her or their desire to do so and will submit to Franchisor specifications, photographs, samples, and/or other information requested by Franchisor. Franchisor will, within a reasonable time, determine whether the equipment or supplier meets Franchisor's specifications and standards and notify Franchisee whether the Center is authorized to use such equipment in the operation of the Center or to purchase from such supplier.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, maintaining a uniform image and positive reputation is crucial for the franchise system's success. Therefore, Annex Brands franchisees are required to offer specific products and services, and use particular brands and models of equipment that Annex Brands deems appropriate.
Annex Brands may require franchisees to purchase certain trade dress fixtures, equipment, supplies, other merchandise, and services directly from Annex Brands and/or its affiliates. Alternatively, franchisees may be allowed to purchase from other suppliers, provided that the franchisee holds Annex Brands harmless regarding any products liability cause of action. Annex Brands anticipates a reasonable profit on items or services sold by them or their affiliates to cover overhead expenses.
Furthermore, Annex Brands franchisees must use forms, packaging materials, print materials, labels, and other supplies that conform to Annex Brands' specifications and quality standards. These items must be purchased from suppliers approved by Annex Brands, which may include Annex Brands itself or its affiliates. Annex Brands may modify the list of approved brands and/or suppliers periodically, and franchisees must comply with these modifications by not reordering from any brand or supplier that is no longer approved. If a franchisee wishes to use a non-approved brand or supplier, they must first seek approval from Annex Brands by submitting sufficient information and samples for evaluation.