Under what circumstances is the building permit deposit not required for an Annex Brands franchise?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
You must deposit with us, before or at initial training, $3,000 for a standard, flex or express retail center. We will use the deposit to pay the cost of building permits for your retail center. We will partially refund the deposit to you if the building permits cost less than $3,000. If the building permits cost more than $3,000, we will bill you for the overage. The deposit is uniform for all franchisees, except that if you are converting a qualified existing business to a standard or flex retail
center (see above), you do not pay the deposit if building permits are not required. See Items 7 and 11.
Source: Item 5 — Initial Fees (FDD pages 18–24)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, a building permit deposit is generally required for standard, flex, or express retail centers. This deposit, amounting to $3,000, is used to cover the cost of building permits for the retail center. If the actual cost of the building permits is less than $3,000, Annex Brands will refund the difference. Conversely, if the costs exceed $3,000, the franchisee will be billed for the overage.
However, there is an exception to this requirement. If a franchisee is converting a qualified existing business into a standard or flex retail center, the building permit deposit is not required if building permits are not needed for the conversion. This exception acknowledges that some conversions may not necessitate new building permits, thereby eliminating the need for the deposit.
In summary, while a $3,000 building permit deposit is typically mandatory for new Annex Brands retail centers, franchisees converting existing businesses to a standard or flex retail center are exempt from this deposit if no building permits are required for their specific conversion project. Prospective franchisees should confirm with Annex Brands whether their specific situation qualifies for this exemption to avoid unnecessary upfront costs.