What standards must a proposed transferee meet to be approved by Annex Brands?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE. If Franchisee and its owners are in full compliance with this Agreement and all other agreements between Franchisee and Franchisor or any of its affiliates, Franchisor will not unreasonably withhold its approval of a requested transfer that meets all the applicable requirements of this Subsection 13.C. The proposed transferee or its owners must be individuals of good moral character and otherwise meet Franchisor's then-applicable standards for franchisees. 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. A consequence of entering into a new franchise agreement is that a new Protected Area described in Attachment 3 will be granted to the transferee and this new Protected Area may be smaller in size than the original Protected Area. Franchisee should not represent to transferee that transferee will be granted the original Protected Area.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, if a franchisee wishes to transfer their franchise, the proposed transferee must meet certain standards to gain approval from Annex Brands. The transferee, including all officers, directors, or partners, must be of good moral character and meet Annex Brands' then-applicable standards for franchisees.
Additionally, 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 doing so, the transferee agrees to be bound by all the terms and conditions of those agreements. It is important to note that no additional initial franchise fee will be charged in this case.
Furthermore, on or before the closing date of the transfer, the transferee is required to deposit $5,500 with Annex Brands. This deposit will be used for the new Center/new owner marketing program, as outlined in Subsection 10.C of the Franchise Agreement. Before or at the initial training, the transferee must also pay the then-current software license transfer fees to Annex Brands, as specified in Attachment 6. These conditions ensure that the transferee is fully committed to the Annex Brands system and prepared to operate the franchise successfully.