After termination of my engagement or employment with Annex Brands, what geographic areas are covered by the non-compete agreement?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
or Franchisor.
- (d) For 1 year after termination of your engagement or employment, regardless of the cause of termination, you will not, without the written consent of us and Franchisor, directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any other person or entity, own, maintain, engage in, have any interest in or perform any service for any business that offers, or that franchises or licenses others to offer, products or services that are the same as or substantially similar to the products or services that were or could have been offered by us or Franchisor when you were engaged or employed, and that operates: (1) within our Protected Area, or (2) within the Protected Area of any other franchisee's Franchised Business operating at the time of termination.
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- Reduction in Scope of Covenant. You agree that we or Franchisor may, in our sole discretion, reduce (but never increase) the scope of any term or subpart of any term in this Agreement without your consent, effective immediately on written notice from us or Franchisor, and you agree that you will promptly comply with any term or subpart so modified, that will be fully enforceable notwithstanding any other term or subpart of this Agreement.
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- Covenants As Independent and As Conditions Precedent to Employment or Engagement. Your covenants in Section 1 are independent of any other terms of this Agreement, and are conditions precedent to engagement or employment.
Source: Item 23 — Receipts (FDD pages 110–299)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, for one year after the termination of engagement or employment, an individual is restricted from involvement with any business offering similar products or services to those offered (or potentially offered) by Annex Brands. This restriction applies within the Protected Area of the specific franchise location where the individual was engaged or employed. It also extends to the Protected Areas of any other Annex Brands franchise operating at the time of termination.
This means that a former employee or franchisee employee cannot work for a competitor or start a competing business within the defined geographic areas of existing Annex Brands franchises. The non-compete agreement aims to protect Annex Brands' market share and the investment of its franchisees by preventing former employees from using their knowledge of the business to benefit a competing entity in the same area.
It is important to note that Annex Brands retains the right to reduce the scope of any term within the agreement, including the non-compete clause, at its discretion with written notice. This could potentially lessen the restrictions on a former employee. However, the agreement explicitly states that Annex Brands cannot increase the scope of any term. Additionally, the agreement specifies that these covenants are independent and serve as conditions for employment or engagement, meaning that any claims against Annex Brands cannot be used as a defense against the enforcement of these covenants.
Annex Brands, or the Franchisor, can seek injunctive relief, with a $1,000 bond, to prevent any violation of the non-compete agreement. This highlights the seriousness with which Annex Brands intends to enforce these restrictions. Prospective franchisees and their employees should carefully consider the implications of these non-compete terms before entering into an agreement with Annex Brands.