Under what conditions must an Annex Brands franchisee sign a non-compete agreement during a transfer?

According to the 2025 FDD, an Annex Brands franchisee must sign a non-compete agreement as a condition for the franchisor's approval of a transfer. Specifically, the selling franchisee is required to sign a non-compete agreement as part of the transfer process. This requirement is one of several conditions that must be met for Annex Brands to approve the transfer of the franchise to a new owner.

Other conditions for transfer approval include Annex Brands not exercising their right of first refusal, the selling franchisee satisfying all monetary obligations and being in compliance with the franchise agreement, obtaining the lessor's consent to assignment or sublease, and signing a general release. The selling franchisee must also give notice of assignment and notice of offers to purchase and sell.

In addition to the non-compete, the transferee must meet Annex Brands' standards, sign the then-current franchise agreement and related agreements, pay a non-refundable training and processing fee, pay a new center/new owner marketing program deposit, pay any software license transfer fees, obtain required software programs and licenses, and complete initial training. Furthermore, either the selling franchisee or the transferee may be required to remodel the business, add or delete equipment, and change signage to meet current standards. They must also pay the then-current transfer fee, use an escrow agent, pay escrow fees, and provide copies of escrow information and executed instructions to Annex Brands.

This comprehensive list of requirements highlights the importance Annex Brands places on ensuring that any transfer of ownership maintains the standards and integrity of the franchise system. The non-compete agreement protects Annex Brands' interests by preventing the selling franchisee from immediately opening a competing business and potentially diverting customers.