Does Annex Brands require all officers of the transferee to execute the new franchise agreement?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
If the transfer is of a controlling interest in Franchisee, or is one of a series of transfers that in the aggregate constitute the transfer of a controlling interest in Franchisee, all of the following conditions must be met prior to, or concurrently with, the effective date of the transfer:
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- The transferee, including all its officers, directors or partners will jointly and severally execute the then-current franchise agreement and other standard ancillary agreements thereby agreeing to be bound by all the terms and conditions of those agreement(s) (except that no additional initial franchise fee will be charged).
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, if the transfer of a controlling interest in the franchise occurs, Annex Brands requires all officers, directors, or partners of the transferee to jointly and severally execute the then-current franchise agreement and other standard ancillary agreements. By doing so, they agree to be bound by all the terms and conditions of those agreements. However, the transferee will not be charged an additional initial franchise fee.
This requirement ensures that all individuals in leadership positions within the transferee organization are legally bound to uphold the obligations and responsibilities outlined in the franchise agreement. This provides Annex Brands with a legal recourse should the transferee violate the agreement.
For a prospective Annex Brands franchisee, this condition highlights the importance of ensuring that all officers, directors, and partners are fully aware of and willing to commit to the terms of the franchise agreement before proceeding with the transfer. It also clarifies that while a new agreement is required, an additional initial franchise fee will not be imposed, which could be a significant cost saving.