What standards must a proposed transferee meet to gain Annex Brands' approval?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, a proposed transferee must meet certain standards to gain approval for a transfer. If the franchisee and its owners are in full compliance with the existing agreement and all other agreements with Annex Brands or its affiliates, Annex Brands will not unreasonably withhold approval, provided the transfer meets all applicable requirements. The proposed transferee and their owners must demonstrate good moral character and meet Annex Brands' then-current standards for franchisees.
If the transfer involves a controlling interest in the franchise, or is part of a series of transfers that collectively result in a transfer of controlling interest, additional conditions apply. The transferee, including all officers, directors, or partners, must jointly and severally execute the then-current franchise agreement and other standard ancillary agreements. By doing so, they agree to be bound by all the terms and conditions of those agreements. However, no additional initial franchise fee will be charged in this case.
This transfer effectively supersedes the previous franchise agreement when a new agreement is entered into with the transferee. These conditions ensure that any new franchisee meets Annex Brands' standards and is legally bound to the franchise agreement, maintaining the integrity and consistency of the Annex Brands franchise system.