After ceasing operation of an Anago subfranchise, is the subfranchisor allowed to solicit clients?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 9.4 - Cessation of Operation
- (a) Subfranchisor will immediately cease operation of the Subfranchise Business and shall not directly or indirectly, at any time or in any manner identify itself or any business as a current or former Anago Subfranchise, franchisee, licensee or dealer of, or otherwise associated with, Franchisor or the System. Without limiting the generality of the foregoing, Subfranchisor shall immediately: (i) cease selling Unit Franchises for the Franchisor; (ii) cease using all advertising materials, forms and other materials bearing the Proprietary Marks; (iii) cease holding itself out as a Subfranchisor of Franchisor; (iv) take all steps necessary to disassociate itself from Franchisor and the System; (v) cease solicitations of Clients; (vi) cease all communication with all Clients; (vii) cease providing services to Unit Franchisees; and (viii) promptly and at its own expense make the alterations Franchisor may specify in the Anago Manuals (or otherwise) to distinguish the Premises clearly from its former appearance in order to prevent public confusion. Franchisor is free to sell new Unit Franchises, enter into new Subfranchise rights agreements or other arrangements in the Area without any obligation to the Subfranchisor. Subfranchisor shall immediately assign all Client Accounts to Franchisor in accordance with Section 9.5 below.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a subfranchisor is explicitly prohibited from soliciting clients after ceasing operations. Specifically, Section 9.4 (a) states that the subfranchisor must immediately cease operation of the Subfranchise Business and not identify itself as a current or former Anago subfranchise.
This cessation includes several key restrictions. The subfranchisor must stop selling unit franchises, discontinue using advertising materials with Anago's proprietary marks, and cease presenting themselves as an Anago subfranchisor. Furthermore, they must take all necessary steps to disassociate from Anago and the Anago system. Critically, the subfranchisor must cease all solicitation of clients and all communication with clients. They must also stop providing services to unit franchisees.
In practical terms, this means that a former Anago subfranchisor cannot leverage their past association with Anago to gain a competitive advantage. All client accounts are assigned to Anago, preventing the subfranchisor from directly or indirectly benefiting from those relationships after the agreement ends. This provision protects Anago's client base and ensures a clean break between the company and the former subfranchisor.