What is Annex Brands required to do with then-existing franchise agreements in the State of Washington to remove any no-poaching provisions?
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 the 2025 FDD, Annex Brands entered into an Assurance of Discontinuance (AOD) with the State of Washington Office of Attorney General (OAG) on October 7, 2019, due to concerns about no-poaching provisions in their franchise agreements. These provisions, which restrict franchisees from soliciting or hiring employees from Annex Brands or other franchisees, were investigated by the OAG for potentially violating the State of Washington Consumer Protection Act. Even though Annex Brands had already voluntarily removed these provisions and had not enforced them, they entered into the AOD to avoid legal complications.
As part of the AOD, Annex Brands is required to take several actions. They must refrain from including no-poaching provisions in future franchise agreements nationwide and also refrain from enforcing any existing no-poaching provisions nationwide. Additionally, Annex Brands is obligated to notify all of their franchisees about the AOD.
Specifically regarding then-existing franchise agreements in the State of Washington, Annex Brands is required to actively seek to amend these agreements to remove any no-poaching provisions. Furthermore, Annex Brands must remove no-poaching provisions in all then-existing franchise agreements nationwide as those agreements come up for renewal or renegotiation. The FDD confirms that Annex Brands has complied with, and is continuing to comply with, the terms of the AOD.