Does Annex Brands reserve the right to add further exclusions to the Gross Sales calculation?

According to Annex Brands's 2025 Franchise Disclosure Document, Annex Brands retains the right to modify the calculation of Gross Sales by adding further exclusions. Gross Sales include all revenue for products and services, with specific exclusions listed.

The FDD states that Annex Brands reserves the right to periodically add exclusions to the Gross Sales calculation. This can be done as new programs, products, or services are established, or as changes to existing ones are made. These changes will be specified in the Annex Brands manuals, in writing, or otherwise communicated.

For a prospective franchisee, this means that the basis on which royalties and marketing fees are calculated could change over time. While the initial list of exclusions is defined, Annex Brands has the discretion to add to it, potentially affecting the franchisee's financial obligations. It would be prudent for a potential franchisee to seek clarification on how frequently these exclusions have been modified in the past and under what circumstances Annex Brands typically makes such changes.

This flexibility allows Annex Brands to adapt to changing market conditions and new offerings, but it also introduces an element of uncertainty for franchisees, as it could impact their revenue calculations and royalty payments. Franchisees should stay informed of any updates to the Gross Sales definition to accurately track their financial performance and obligations to Annex Brands.