How is the advertising contribution calculated for an Anago franchise?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
If a Fund is established, Franchisor may require Subfranchisor to contribute a monthly amount not to exceed 2.2% of Subfranchisor's Gross Revenues during the preceding month to the Fund.
The Fund will not be Franchisor's asset.
The Fund is not a trust.
If established, Subfranchisor's payments to the Fund shall be used for advertising, marketing, promotion, production and development of advertising, marketing, promotional and other programs, product development, merchandising, public relations, administrative expenses, programs designed to increase business and enhance and further the public reputation of the Anago franchise System, and activities related to any or all of the foregoing.
The content of all activities of the Fund, including, without limitation, the media selected and employed, as well as the area and units to be targeted for such activities shall be at the sole discretion of Franchisor.
Franchisor does not owe any fiduciary obligation to Subfranchisor or Unit Franchisees for administering the Fund or any other reason.
Franchisor undertakes no obligation to make expenditures for Subfranchisor or any individual Unit Franchisee which are equivalent or proportionate to contributions paid under this Agreement, or to insure that Subfranchisor or any unit Franchisee benefits directly or on a pro-rata basis from activities of the Fund, if any.
Franchisor has the right to include a notation on all advertisements stating the availability of franchise and/or career opportunities.
A statement of operations of the Fund, if developed, will be prepared annually by an independent public accountant selected by Franchisor.
Upon reasonable request, Franchisor will provide Subfranchisor a copy of the annual statement of operations.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if Anago establishes an advertising fund, subfranchisors may be required to contribute a monthly amount. This contribution will not exceed 2.2% of the subfranchisor's gross revenues during the preceding month. The advertising fund is intended to benefit all franchisees within the Anago system by maximizing public recognition and acceptance of the Anago trademarks. However, Anago is not obligated to ensure that each subfranchisor benefits directly or proportionally from the advertising or marketing efforts. The content, media, and targeted areas for advertising are at the sole discretion of Anago. Anago does not have any fiduciary duty to subfranchisors or unit franchisees regarding the administration of the fund.
The funds collected are used exclusively for the costs and expenses of maintaining, administering, and conducting advertising, marketing, public relations, and promotional programs. These activities aim to enhance the image of the Anago system and may include media advertising campaigns, direct mail advertising, marketing surveys, and the employment of advertising agencies. The fund may also cover the costs of promotional items, visual merchandising, and the provision of marketing materials and services. Advertising efforts can be regional or national and may utilize various media such as print, internet, radio, or television.
Anago maintains separate bookkeeping accounts for the advertising fund, ensuring that the contributions are not used for its general operating expenses. However, Anago may use the advertising contributions to cover the costs, expenses, and overhead incurred in the direction, implementation, and administration of the fund, including personnel costs for creating and implementing advertising programs. The advertising contributions not spent in the fiscal year are typically carried forward to the next year for advertising and related expenses. Anago has the right to terminate the fund at any time, but only after all contributions have been expended.
For a prospective Anago subfranchisor, this means that up to 2.2% of their gross monthly revenue could be allocated to the advertising fund, which Anago controls and uses to promote the brand. While the goal is to benefit the entire system, there's no guarantee of direct or proportional benefit to each subfranchisor. It is important for potential subfranchisors to understand that the franchisor has significant discretion in how these funds are spent and that the subfranchisor has limited control over the advertising strategies employed.