Does the restriction on transfer for Annex Brands include the sale of stock in the franchisee's company?

According to the 2025 FDD, Annex Brands' franchise agreement specifies that restrictions on transfer apply to the sale of stock in the franchisee's company. Specifically, the agreement states that the sale, gift, or other transfer of capital stock, or of a partnership, LLC, or other ownership interest in the franchisee, is subject to transfer restrictions. This means a franchisee cannot sell or transfer ownership in their company without prior approval from Annex Brands.

This requirement ensures that Annex Brands maintains control over who becomes a franchisee and can uphold its brand standards. The FDD states that the rights and duties created by the agreement are personal to the franchisee and that Annex Brands has granted rights to the franchisee based on their individual or collective character, skills, aptitude, attitude, business ability, and financial capacity. Therefore, any change in ownership must be approved by Annex Brands to ensure the new owner meets their standards.

If a franchisee wishes to transfer a controlling interest, the proposed transferee must execute the then-current franchise agreement and other standard ancillary agreements. The transferee must also meet Annex Brands' standards for franchisees. These conditions are in place to protect the Annex Brands brand and ensure that any new owners are fully committed to the franchise system and capable of operating the business successfully. The transfer has the effect of superseding the previous franchise agreement, when a new franchise agreement is entered into with the transferee.