For Annex Brands, what standard ancillary agreements must the transferee execute?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
If the transfer is of a controlling interest in Franchisee, or is one of a series of transfers that in the aggregate constitute the transfer of a controlling interest in Franchisee, all of the following conditions must be met prior to, or concurrently with, the effective date of the transfer:
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- The transferee, including all its officers, directors or partners will jointly and severally execute the then-current franchise agreement and other standard ancillary agreements thereby agreeing to be bound by all the terms and conditions of those agreement(s) (except that no additional initial franchise fee will be charged).
A transfer has the effect of superseding the previous franchise agreement, when a new franchise agreement is entered into with the transferee.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, if a franchisee with Annex Brands wishes to transfer their franchise to a new owner, the transferee may be required to sign certain agreements. Specifically, if the transfer involves a controlling interest in the franchise, the transferee must execute the then-current franchise agreement and other standard ancillary agreements. By signing these agreements, the transferee agrees to be bound by all the terms and conditions outlined within them. It is important to note that no additional initial franchise fee will be charged in this case.
This requirement ensures that the new owner is fully aware of and compliant with Annex Brands's standards and obligations. The new franchise agreement supersedes the previous one, establishing a fresh contractual relationship between Annex Brands and the transferee. This also allows Annex Brands to implement any updated terms, fees, or operational requirements that may have changed since the original agreement was signed.
Prospective franchisees should be aware that entering into a new franchise agreement may also affect the protected area granted to the transferee. The FDD notes that the new protected area may be smaller than the original one. Therefore, it is crucial for both the franchisee and the transferee to understand all the implications of the transfer, including potential changes to fees, payment schedules, operational protocols, and reporting requirements.