At whose option will the Annex Brands lease contain specific provisions?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
A lease or sublease for the Center will be subject to a Collateral Assignment of Lease (Attachment 5), will contain such terms as are reasonably acceptable to Franchisor, and, at Franchisor's option, will contain substantially the following provisions:
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- "Anything contained in this Lease to the contrary notwithstanding, Lessor agrees that, without its consent, this Lease and the right, title and interest of the Lessee hereunder may be assigned by the Lessee to Franchisor, or its successor or designee."
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- "Lessee hereby agrees that Lessor may, upon the written request of Franchisor, or its successor, disclose to Franchisor or its successor, all reports, information or data in Lessor's possession respecting sales made in, upon or from the leased premises."
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- "Lessor will give written notice to Franchisor, or its successor, concurrently with the giving of such notice to Lessee, of any default by Lessee under the Lease, and Franchisor or its successor will have, after the expiration of the period during which the Lessee may cure such default, an additional 15 days to cure, in its sole discretion, any such default. Such notice will be sent to Annex Brands, Inc., Attention: Patrick F. Edd, CEO and President, 7580 Metropolitan Drive, Suite 200, San Diego, CA 92108, or such other address as Franchisor may periodically specify in writing to Lessor".
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- "Lessor hereby agrees that, after the expiration, termination or non-renewal of this Lease, or of the Franchise between Lessee and Franchisor or its successor, Franchisor, or its successor or designee, may enter upon the leased premises for the purpose of removing all signs and other material bearing the trademarks, service marks or other commercial symbols of Franchisor or its successor".
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, certain provisions in the lease or sublease for the franchise center can be included at Annex Brands' option. Specifically, the lease will be subject to a Collateral Assignment of Lease and must contain terms reasonably acceptable to Annex Brands.
At Annex Brands' discretion, the lease may include clauses allowing the franchisee's lease to be assigned to Annex Brands without the lessor's consent, enabling the lessor to disclose sales information to Annex Brands, requiring the lessor to notify Annex Brands of any franchisee defaults with an additional 15-day cure period for Annex Brands, and permitting Annex Brands to remove its branding materials from the premises after the lease or franchise agreement ends.
This provision is beneficial for Annex Brands as it provides them with control and oversight regarding the franchise location. It allows Annex Brands to protect its brand and maintain operational standards. For a prospective franchisee, this means they must be aware that Annex Brands has significant influence over the lease terms and can step in to cure defaults or manage the location if necessary. The franchisee should carefully review the lease agreement and understand the implications of these provisions.
It is important for a prospective Annex Brands franchisee to discuss these lease provisions with the franchisor and seek legal counsel to fully understand their rights and obligations under the lease and franchise agreement. Understanding the franchisor's role and control over the lease is crucial for a successful and compliant franchise operation.