What actions can Anago Franchisor take upon the occurrence of an Event of Default?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
If You are in default We may, at Our option, terminate all rights granted to You under this Agreement, without affording You an opportunity to cure the default, effective immediately upon notice to You, upon the occurrence of any of the following Events of Default:
- (a) If You cease to perform contracted service to the Accounts for more than 3 consecutive days without Our consent;
- (b) If You fail or refuse to comply with any mandatory specification, standard or operating procedure We require in this Agreement, in the Manual or otherwise in writing, on the cleanliness or sanitation of the Anago Unit Franchise;
- (c) If You, or Your officer, director, owner or managerial employee is convicted of a felony, a crime of moral turpitude or any other crime or offense that We reasonably believe is likely to have a material adverse effect on the System, the Proprietary Property, the goodwill associated with the Proprietary Property, or Our interest in any of the Proprietary Property, unless You immediately and legally terminate the individual as an officer, director, owner and employee;
- (d) If You deny Us the right to inspect the Anago Unit Franchise or to audit the Records of the Anago Unit Franchise;
- (e) If You engage in conduct that is harmful to or reflects unfavorably on You or the System in that the conduct exhibits a reckless disregard for the physical or mental well-being of employees, Clients, Our representatives or the public at large, including battery, assault, sexual harassment or discrimination, racial harassment or discrimination, alcohol or drug abuse or other forms of threatening, outrageous or unacceptable behavior as determined in Our sole discretion;
- (f) If You, contrary to this Agreement, purport to encumber or transfer any rights or obligations under this Agreement (including transfers of any interest in You), without Our written consent;
- (g) If any breach occurs under Sections 6.2 or 13.1 concerning confidentiality and noncompetition covenants;
- (h) If You knowingly maintain false Records, or knowingly submit any false Records to Us;
- (i) If You misuse or make any unauthorized use of the Proprietary Property or otherwise materially impair the goodwill associated with the Proprietary Property or Our rights in the Proprietary Property;
- (j) If You receive from Us 3 or more Notices of Default for the same or similar defaults during any 12 consecutive months, even if all defaults were cured;
- (k) If You lose or voluntarily cease service to all Anago contracts You have agreed to service, and subsequently fail to complete corrective measures classes with 90 days of notice to
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, several actions can be taken by Anago if a franchisee defaults. Anago has the option to terminate all rights granted to the franchisee under the agreement, without providing an opportunity to cure the default. This termination is effective immediately upon notice to the franchisee.
Events of default that trigger immediate termination include ceasing contracted services for more than 3 days without consent, failing to comply with cleanliness or sanitation standards, conviction of a felony or crime of moral turpitude by the franchisee or their officer, director, owner, or managerial employee, denying inspection rights to Anago, engaging in harmful conduct, unauthorized transfer of rights, breaches of confidentiality or noncompetition agreements, maintaining false records, misusing proprietary property, receiving three or more default notices in 12 months, or losing service to all Anago contracts without completing corrective measures within 90 days of notice.
Additionally, if a franchisee fails to cure a default within a specified cure period, Anago can terminate the agreement without additional notice. Upon termination, the franchisee must cease operations using Anago's Proprietary Marks or System, discontinue using the name, and pay all outstanding amounts owed to Anago, its affiliates, and other creditors. Anago may also retain all fees paid, except for refunds expressly required in the agreement. These terms are typical in franchise agreements to protect the brand and ensure compliance with standards.