Under what conditions can Annex Brands terminate a franchise with cause?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| (f) | Termination by us with cause | 3.A, 14.D and 15 | We may terminate your franchise only if you default. | | (g) | "Cause" defined-curable defaults | 15.B | You fail to pay required sums when due to us or our affiliates and do not cure within 10 days after notice; you fail to comply with franchise agreement, manuals, operating procedures, standards or specifications and do not cure within 30 days after notice; you fail to operate the franchise for 5 consecutive business days and do not cure within 7 days after notice. | | (h) "Cause" defined- non-curable defaults | 3.A, 14.D and 15.A | On notice: You fail to open your franchise within 365 days after signing the franchise agreement; you do not locate an acceptable site within 365 days after signing the franchise agreement (3.A); you fail to give notice of non-renewal or to satisfy renewal conditions (14.D); you intentionally make material misrepresentations or omissions in your application for the franchise; you are convicted or plead no contest to a felony or crime that may adversely affect your reputation or your franchise's reputation; you make unauthorized use or disclosure of our confidential information; you surrender or transfer control of your franchise in violation of the franchise agreement; you underreport Gross Receipts by 5% at least 3 times; you make unauthorized use of any Mark; your lease or sub-lease is terminated; you fail to complete initial training; or you receive 3 notices of default in a 12-month period (15.A).
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 71–74)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, Annex Brands can terminate a franchise agreement with cause if the franchisee defaults. Defaults are categorized as either curable or non-curable.
Curable defaults include failing to pay required sums to Annex Brands or its affiliates when due, and not curing the failure within 10 days after notice. It also includes failing to comply with the franchise agreement, manuals, operating procedures, standards, or specifications, and not curing it within 30 days after notice. Lastly, it is a curable default if the franchisee fails to operate the franchise for 5 consecutive business days and does not cure within 7 days after notice.
Non-curable defaults, which allow Annex Brands to terminate the agreement immediately upon notice, include failing to open the franchise within 365 days after signing the franchise agreement, not locating an acceptable site within 365 days after signing, failing to give notice of non-renewal or satisfy renewal conditions, intentionally making material misrepresentations or omissions in the franchise application, being convicted of a felony or crime that may adversely affect the reputation of Annex Brands or the franchise, making unauthorized use or disclosure of confidential information, surrendering or transferring control of the franchise in violation of the agreement, underreporting Gross Receipts by 5% at least 3 times, making unauthorized use of any Mark, having the lease or sub-lease terminated, failing to complete initial training, or receiving 3 notices of default in a 12-month period. These conditions provide Annex Brands with specific grounds for terminating the franchise agreement if the franchisee fails to meet certain obligations or engages in prohibited conduct.