Under the Sales Agency Agreement, what must an Annex Brands franchisee disclose to all shippers?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Sales Agency Agreement ("Agreement") is entered into by and between Annex Brands, Inc. ("Franchisor"), who is a Non-Vessel Operating Common Carrier ("NVOCC") under the Federal Maritime Commission OTI License No. 023289NF, and |
|---|
| ("Franchisee") regarding Franchisee's engagement by Franchisor to act as a sales agent ("Ocean |
| Freight Broker") as set forth below. |
| Federal shipping regulations define an Ocean Freight Broker as an entity which is engaged by a |
| carrier (NVOCC) to secure cargo for such carrier and/or to sell or offer for sale ocean |
| transportation services, and which holds itself out to the public as one who negotiates between |
| shipper or consignee and carrier for the purchase, sale, conditions and terms of transportation. (See |
| 46 CFR Sec. 5152(n).) |
| Franchisee hereby acknowledges that it is NOT an ocean freight forwarder or an NVOCC, and that |
| it does not provide, and will not provide, either ocean freight forwarding or NVOCC services. |
| Franchisee will act ONLY as an Ocean Freight Broker. Moreover, Franchisee hereby |
| acknowledges that it does not have, and will not have, a direct or indirect beneficial interest in any |
| shipment being forwarded. |
| As an Ocean Freight Broker, Franchisee agrees that it will not provide NVOCC or ocean freight |
| forwarding services under this Agreement and will disclose to all shippers that Franchisee is acting |
| solely as an Ocean Freight Broker on behalf of Franchisor. |
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, a franchisee operating as an Ocean Freight Broker must disclose their role to all shippers. Specifically, the franchisee must inform shippers that they are acting solely as an Ocean Freight Broker on behalf of Annex Brands, the Franchisor. This disclosure is a requirement under the Sales Agency Agreement.
This requirement ensures transparency in the relationship between the franchisee, Annex Brands, and the shippers. By disclosing their role as an Ocean Freight Broker, the franchisee clarifies that they are acting as a sales agent for Annex Brands and not as an ocean freight forwarder or Non-Vessel Operating Common Carrier (NVOCC). This distinction is important because it defines the scope of services the franchisee is authorized to provide.
For a prospective Annex Brands franchisee, this means they must incorporate this disclosure into their standard operating procedures when dealing with shippers. This could involve verbal communication, written notices, or inclusion in service agreements. Failing to make this disclosure could be a breach of the Sales Agency Agreement and the Franchise Agreement, potentially leading to termination of the agreement.
This disclosure requirement is not uncommon in franchise systems where franchisees act as agents or brokers for the franchisor. It helps to avoid confusion among customers and ensures that all parties understand the nature of the services being provided and the roles of the different entities involved.