Under what circumstances can Annex Brands service a customer referral themselves, or through another center, affiliated business, or third party, even within a franchisee's protected area?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee is willing and able to service a franchisor customer referral within its Protected Area in the manner and timeframe specified, and for the price that Franchisor has quoted Franchisee (which price will be less than the total price being paid by the customer), Franchisee may accept the franchisor customer referral
and perform the work according to the specifications agreed to in advance. If Franchisee is not in compliance with this Agreement or any other agreement between Franchisee and Franchisor or any of its affiliates, if Franchisee refuses a franchisor customer referral, or if Franchisor reasonably believes that Franchisee is unable to service a franchisor customer referral (including because Franchisee does not have the capability or resources, or is otherwise ineligible), Franchisor may service such franchisor customer referral itself, or through another Center or Commercial Logistics Center, an affiliated business, or a third party, regardless of where the customer is located and without any liability to Franchisee.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands retains the right to service customer referrals themselves, or through other entities, even within a franchisee's protected area under specific circumstances. This primarily occurs when a franchisee is unable or unwilling to fulfill the referral.
Specifically, if a franchisee is not in compliance with their agreements with Annex Brands or its affiliates, refuses a customer referral, or if Annex Brands reasonably believes the franchisee cannot adequately service the referral due to capability, resources, or eligibility, Annex Brands may step in. In these instances, Annex Brands can service the referral directly, through another center, a Commercial Logistics Center, an affiliated business, or a third party, irrespective of the customer's location.
This provision is significant for prospective franchisees as it highlights that the protected area is not an absolute guarantee against competition from Annex Brands or its related entities. While franchisees have the first right to accept and service referrals within their area, failure to meet the required standards or refusal to accept a referral opens the door for Annex Brands to utilize alternative service channels. This ensures that customer needs are met, but it also places a responsibility on the franchisee to maintain compliance and be responsive to referral opportunities to avoid losing business within their protected area.