How does Anago collect royalty fees from master franchisees, and when are these royalties recognized?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
reement, except if Subfranchisor is not accepted by Franchisor at its home office within 30 days from the Agreement Date or except as provided in Subsection 2.1(b).
Section 4.2 - Ongoing Payments to Franchisor
- (a) Royalty Fee. During the Term, Subfranchisor will pay to Franchisor a monthly royalty fee ("Royalty Fee") by the 20th day of each month equal to 5% of the previous calendar month's Gross Revenues. Subfranchisor acknowledges and agrees that its payment of Royalty Fees to Franchisor is subject to a monthly minimum equal to the greater of: (i) 5% of the previous month's Gross Revenues generated by Subfranchisor and the Unit Franchisees under the Unit Franchise Agreements; or (ii) $1,500 per month starting in the 13th month of operation, and each year thereafter the minimum monthly royalty shall increase at the rate of an additional $1,500 each year.
- (b) Administrative Support Fee. During the Term, Subfranchisor will pay to Franchisor a monthly fee of 2% of the previous calendar month's Gross Revenues collected.
- (c) Unit Franchisee Fee. During the Term, Subfranchisor will pay to Franchisor a flat fee sum of $400.00 for each Anago Unit Franchise sold by or on behalf of the Subfranchisor.
- (d) Fund Contributions. If a Fund is established pursuant to Section 2.5(b) of this Agreement, Subfranchisor shall contribute, on a monthly basis, an amount not to exceed 2.2% of Subfranchisor's monthly Gross Revenues during the preceding month, as designated by Franchisor.
- (e) Website Maintenance Fee. If Franchisor, in its sole discretion and upon written notice to Subfranchisor, assumes the responsibility for maintaining Subfranchisor's webpage for the business that Subfranchisor conducts pursuant to this Agreement, then Subfranchisor will pay to Franchisor a monthly fee (currently $1,500)
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, master franchisees (referred to as Subfranchisors) are required to pay ongoing fees to Anago, including a monthly royalty fee. This Royalty Fee is paid by the 20th day of each month and is equal to 5% of the previous calendar month's Gross Revenues. Gross Revenues are considered received when the goods or services are delivered or rendered, or when the relevant sale takes place, whichever comes first.
Anago's Subfranchisors must pay a minimum monthly royalty fee, which is the greater of 5% of the previous month's Gross Revenues generated by the Subfranchisor and its Unit Franchisees, or $1,500 per month starting in the 13th month of operation. This minimum monthly royalty increases by an additional $1,500 each year thereafter. In addition to the royalty fee, Subfranchisors also pay an Administrative Support Fee of 2% of the previous calendar month's Gross Revenues collected, as well as a flat fee of $400 for each Anago Unit Franchise sold by or on behalf of the Subfranchisor.
All payments required under Section 4.2 of the agreement must be paid to Anago in the manner and according to the procedures designated by Anago, which are subject to change with written notice to the Subfranchisor. Anago has the right to require Subfranchisors to pay all fees directly via electronic funds transfer (EFT) with written notice. Subfranchisors must complete and deliver any forms required to effectuate changes necessary to accommodate revised payment requirements, including those required to initiate payments via EFT.