Can Annex Brands transfer the franchise agreement?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| As an inducement to Annex Brands, Inc., a California corporation ("Franchisor"), to enter into that certain franchise agreement with an effective date of ("Agreement") by and between Franchisor and |
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| ("Franchisee"), I/we, as personal guarantor(s) (each a "Guarantor"), jointly and severally, |
| absolutely and unequivocally, personally guarantee the performance by Franchisee of all |
| obligations of Franchisee to Franchisor under, or arising out of, the Agreement, and all other |
| agreements signed between Franchisor or any of Franchisor's affiliates ("Other Agreements"), and |
| agree to perform those obligations should Franchisee be unable to perform. The obligations |
| assumed under this Continuing Personal Guarantee are not transferable. |
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the obligations assumed under the Continuing Personal Guarantee are not transferable. This means that while Annex Brands as the franchisor can likely transfer the franchise agreement, the personal guarantee provided by the franchisee is not transferable.
This stipulation protects Annex Brands by ensuring that the original guarantor remains responsible for the franchisee's obligations, even if the franchise changes hands. It prevents a situation where a new franchisee could attempt to substitute a less creditworthy guarantor, potentially increasing Annex Brands's risk.
For a prospective Annex Brands franchisee, this means that their personal guarantee will remain in effect for the duration of the agreement, regardless of any transfer of the franchise. This is a standard practice in franchising, as it provides the franchisor with a consistent level of security and recourse in case of default. Franchisees should carefully consider the implications of this continuing guarantee and ensure they fully understand their obligations before signing the agreement.