Can Anago or its affiliates be the only approved vendor for a particular product or service?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
provided to or used by vendors of products or services. For any product or service for which we have approved or designated a vendor, you must purchase and require your Unit Franchisees to purchase all such goods and services only from the approved or designated vendor for that product or service, under terms, in the manner, and from the source we designate. In our discretion, there may be only one approved or designated vendor for any particular product or service, and we and our affiliates may be a, or the only, vendor and derive revenue from your and your Units Franchisee's purchases. We and our affiliates may use any such revenue as we or they determine, without restriction. We and our affiliates are not currently approved vendors for any particular product or service, but we do act as the intermediary between you and the designated insurance carrier with respect to the purchase of the required insurance.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 23–26)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago reserves the right to designate a single approved vendor for any particular product or service required for the operation of the franchise. This means that Anago, or its affiliates, may be the sole approved vendor for certain items, and they can derive revenue from franchisee purchases. Currently, Anago acts as the intermediary between the franchisee and the designated insurance carrier for required insurance.
This arrangement has several implications for prospective Anago franchisees. First, franchisees may be required to purchase certain products or services exclusively from Anago or its approved vendors, potentially limiting their ability to shop for the best prices or preferred suppliers. Second, Anago and its affiliates may profit from these required purchases, adding an additional layer of cost for the franchisee. While Anago states that it is not currently an approved vendor for any particular product or service, it does require franchisees to purchase or lease computer equipment from them or their designee. They are also the only approved supplier for the NBDS System.
The FDD also states that during AFI's fiscal year ended December 31, 2023, it derived $280,409.29, or 2.98% of its total revenue of $9,418,968, from required franchisee purchases of branded items such as apparel and stationery. This demonstrates the potential for Anago to generate significant revenue through required purchases. Franchisees should carefully consider these requirements and the potential costs when evaluating the Anago franchise opportunity.
Prospective franchisees should inquire about the specific products and services for which Anago or its affiliates may be the sole approved vendor, as well as the potential costs and benefits associated with these arrangements. Understanding these requirements is crucial for making an informed decision about investing in an Anago franchise.