What is Annex Brands required to refrain from doing regarding no-poaching provisions in future franchise agreements nationwide?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Annex Brands, Inc. Assurance of Discontinuance, Matter No. 19-2-26209-5 SEA, State of Washington, King County Superior Court. On October 7, 2019, we entered into an Assurance of Discontinuance ("AOD") with the State of Washington Office of Attorney General ("OAG"). The OAG had investigated us, as it is investigating all franchisors with State of Washington registrations, regarding the inclusion by franchisors of no-poaching provisions in their franchise agreements and the enforcement by franchisors of those provisions. No-poaching provisions in franchise agreements restrict franchisees from soliciting or hiring workers from the franchisor or other franchisees. The OAG alleges that no-poaching provisions are in restraint of trade and violate the State of Washington Consumer Protection Act. Before the OAG investigated us, we had voluntarily removed nopoaching provisions from our franchise agreements, and we had not enforced those provisions. Nevertheless, to avoid protracted and expensive litigation, and while expressly denying any violation of law, we entered into the AOD, which required us to: (a) refrain from including no-poaching provisions in future franchise agreements nationwide; (b) refrain from enforcing no-poaching provisions nationwide; (c) notify our franchisees of the AOD; (d) seek to amend all then-existing franchise agreements in the State of Washington to remove any no-poaching provisions; and (e) remove no-poaching provisions in thenexisting franchise agreements nationwide as they are renewed or renegotiated. We complied with, and are complying with, the AOD.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands entered into an Assurance of Discontinuance (AOD) with the State of Washington Office of Attorney General (OAG) on October 7, 2019. This agreement stemmed from an investigation into no-poaching provisions in franchise agreements, which restrict franchisees from hiring or soliciting workers from either the franchisor or other franchisees. The OAG contended that these provisions restrain trade and violate the State of Washington Consumer Protection Act.
Even though Annex Brands had already voluntarily removed no-poaching provisions from their franchise agreements and had not enforced them, they entered into the AOD to avoid prolonged and costly litigation, while expressly denying any violation of law. As a result of the AOD, Annex Brands is required to refrain from including no-poaching provisions in future franchise agreements nationwide.
Additionally, Annex Brands must refrain from enforcing any existing no-poaching provisions nationwide. They were also obligated to notify their franchisees about the AOD, seek to amend all existing franchise agreements in Washington State to remove any no-poaching provisions, and remove such provisions from existing agreements nationwide as they are renewed or renegotiated. The FDD states that Annex Brands has complied with, and is complying with, the AOD.