Annex Brands Commercial Centers

What is the status and nature of the 1 pending litigation case against the franchisor? When do you expect resolution?

How do you justify an advertising fund rate of 3.0%, which is above the typical 1.0-2.75% range for this franchise category?

What is the breakdown of how the 3.0% advertising fund is allocated and spent? Can franchisees request detailed accounting?

Why does the franchise agreement include an unusually long 20-year initial term compared to the typical 5-10 year range? What are the business reasons for this extended period?

Can franchisees renew at the end of 20 years, or must they renegotiate the entire agreement, including fees and terms?

The renewal fee is $8,500 for another 20-year term. Does this fee increase with inflation or remain fixed across multiple renewal cycles?

What are the specific 7 conditions franchisees must meet to qualify for the 20-year renewal option? Are these conditions clearly defined and objectively measurable?

Minimum performance standards require $150,000 (year 1), $250,000 (year 2), and $400,000 (year 3) in gross volume. What happens if a franchisee misses these thresholds? Are there consequences beyond late fees?

Of the 4 unit closures in 2022 and 2 in 2023, what were the stated reasons? Were any related to inability to meet minimum performance standards?

Why are there 5 transfers in 2023 but only 2 in 2024? Does this reflect changes in the business model, market conditions, or franchisee satisfaction?

The territory is 'protected' with encroachment protection but marked as 'non-exclusive.' How do you define these terms, and what prevents the franchisor from opening competing locations nearby?

Given the 15-mile non-compete radius for 2 years, how would this apply if a franchisee exits and wants to establish a competing business in their former service area?

What specific support and training justify the 97/100 Support & Training score, and how are these services measured and maintained?

The franchise agreement requires binding arbitration in San Diego, California, with class action prohibited. How many franchisees are located outside California, and what are the practical implications of this arbitration requirement?

Personal guarantees are required from all shareholders and principal officers. If a franchisee uses a corporate structure, does every shareholder need to personally guarantee all franchise obligations?

What is your indemnification policy in practice? Have franchisees been required to indemnify the franchisor for third-party claims, and what costs have been involved?

The investment score is 73, slightly below the typical 75. What components drive this below-average investment score?

Can you provide the detailed financial performance data (Item 19) showing how many units reported $470,000 median and $671,000 average gross sales? What was the unit count and profitability range?

The ongoing fees score is 64 (above typical 62). With 6.0% royalty plus 3.0% advertising fund (total 9.0%), how does this compare to your competitor franchises in the Business Services category?

What recourse do franchisees have if they believe the franchisor is in breach of its obligations, given the binding arbitration requirement and prohibition on class actions?