Does Annex Brands have the right to approve the terms of the lease or sublease of the Center?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
B. LEASE OR SUBLEASE OF PREMISES FOR THE CENTER. Franchisor has the right to approve the terms of the lease or sublease of the Center. Franchisee agrees to deliver a copy of the proposed lease or sublease to Franchisor for its approval at least 10 days prior to its execution by Franchisee, and to deliver a final, executed copy to Franchisor within 5 days after execution. Franchisee agrees that it will not execute a lease or sublease for the Center that has, for any reason, been disapproved by Franchisor. Franchisee acknowledges and agrees that Franchisor's approval of the terms of any lease or sublease will not constitute a warranty or representation of any kind, expressed or implied, relating to the economic terms of such lease or
sublease. A lease or sublease for the Center will be subject to a Collateral Assignment of Lease (Attachment 5), will contain such terms as are reasonably acceptable to Franchisor, and, at Franchisor's option, will contain substantially the following provisions:
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- "Anything contained in this Lease to the contrary notwithstanding, Lessor agrees that, without its consent, this Lease and the right, title and interest of the Lessee hereunder may be assigned by the Lessee to Franchisor, or its successor or designee."
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- "Lessee hereby agrees that Lessor may, upon the written request of Franchisor, or its successor, disclose to Franchisor or its successor, all reports, information or data in Lessor's possession respecting sales made in, upon or from the leased premises."
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- "Lessor will give written notice to Franchisor, or its successor, concurrently with the giving of such notice to Lessee, of any default by Lessee under the Lease, and Franchisor or its successor will have, after the expiration of the period during which the Lessee may cure such default, an additional 15 days to cure, in its sole discretion, any such default. Such notice will be sent to Annex Brands, Inc., Attention: Patrick F. Edd, CEO and President, 7580 Metropolitan Drive, Suite 200, San Diego, CA 92108, or such other address as Franchisor may periodically specify in writing to Lessor".
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- "Lessor hereby agrees that, after the expiration, termination or non-renewal of this Lease, or of the Franchise between Lessee and Franchisor or its successor, Franchisor, or its successor or designee, may enter upon the leased premises for the purpose of removing all signs and other material bearing the trademarks, service marks or other commercial symbols of Franchisor or its successor".
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands retains the right to approve the terms of the lease or sublease for the franchisee's center. The franchisee must provide Annex Brands with a copy of the proposed lease or sublease for approval at least 10 days before execution, and a final executed copy within 5 days after execution. The franchisee is prohibited from executing any lease or sublease that Annex Brands has disapproved.
This approval does not constitute a warranty or representation regarding the economic terms of the lease or sublease. The lease or sublease will be subject to a Collateral Assignment of Lease and must contain terms reasonably acceptable to Annex Brands. At Annex Brands's option, the lease may include provisions allowing assignment to Annex Brands without the lessor's consent, disclosure of sales information to Annex Brands, notice to Annex Brands of any default by the franchisee, and the right for Annex Brands to enter the premises to remove trademarks and commercial symbols after termination or non-renewal of the lease or franchise agreement.
These stipulations ensure that Annex Brands maintains control over the location and operation of its franchised centers, protecting its brand and ensuring compliance with its standards. The Collateral Assignment of Lease further secures Annex Brands's interest in the property, allowing them to take possession in case of franchisee default or termination. Franchisees should carefully review these requirements and understand the implications for their lease negotiations and obligations.