Can Annex Brands terminate the franchise agreement if the franchisee fails to pay expenses?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement.
- B. TERMINATION WITH OPPORTUNITY TO CURE. Franchisor may terminate the Franchise, subject to giving Franchisee a subsequent written notice of termination, if Franchisee or any of its owners does not correct the following described failure or refusal within the specified number of days after written notice of default is given to Franchisee:
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- fails or refuses to make payments of any amounts due Franchisor or any of its affiliates for royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees under this Agreement and all other agreements, expenses, equipment lease or rental payments and/or supplies payments, purchases from Franchisor and its affiliates, interest, late fees, or any other indebtedness to Franchisor or its affiliates, and does not correct such failure or refusal within 10 days;
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- fails or refuses to comply with any provision of this Agreement (other than those set forth in Subsections 15.B(1) or 15.B(3) of this Agreement), or any mandatory specification, standard or operating procedure prescribed by Franchisor in the Manuals, in writing or otherwise, and does not correct such failure or refusal within 30 days; or
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- abandons or refuses to actively operate the Center for 5 consecutive business days, unless the Center has been closed for a purpose approved by Franchisor; and does not reopen or resume active operation within 7 business days.
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- C. DISCLAIMER.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands can terminate the franchise agreement if a franchisee fails to pay amounts owed. Specifically, Annex Brands may terminate the franchise agreement if the franchisee fails or refuses to make payments for royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees, as well as expenses, equipment lease or rental payments, supplies payments, purchases from Annex Brands and its affiliates, interest, late fees, or any other indebtedness to Annex Brands or its affiliates.
For termination with an opportunity to cure, Annex Brands will provide a written notice of default, and the franchisee has 10 days to correct the failure or refusal to pay. If the franchisee does not correct the failure within this period, Annex Brands may terminate the franchise agreement.
Additionally, if a franchisee has been given three or more notices of breaches within any 12 consecutive month period for failure to pay when due royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees, expenses, equipment lease or rental payments and/or supplies payments, purchases from Annex Brands and its affiliates, interest, late fees, or any other indebtedness to Annex Brands or its affiliates, Annex Brands may terminate the franchise without the opportunity to cure, regardless of whether the franchisee corrected the failure after the written notice.