What conditions must an Anago franchisee meet to obtain consent for a transfer of interest in the franchise agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ment between You and Us or Our Business Affiliates;
- (ii) You sign a general release of all claims against Us, Our Business Affiliates, and our and their respective officers, directors, shareholders, representatives, agents, successors and assigns;
- (iii) The transferee is not involved in a Competitive Business, whether as a franchisor, licensor or as a licensee or franchisee of any chain or system that is similar in nature or in competition with Us, except that the transferee may be Our existing Unit Franchisee;
- (iv) The transferee pays a transfer fee of the greater of: (a) $2,000, or (b) 10% of the sales price, in lieu of the Initial Fee (the "Transfer Fee"). If the transferee is a spouse or child of the transferor, no Transfer Fee will be charged but a reasonable administrative fee (currently $250) will be charged;
- (vi) The transferee interviews at Our principal office without expense to Us and demonstrates to Our satisfaction that the transferee has the business and personal skills, reputation and financial capacity We require;
- (vii) The transferee satisfactorily completes Our application process;
- (viii) The transferee demonstrates to Our sole satisfaction that he or she has
properly assumed and will be able to comply with all of his or her obligations under this Agreement. You will remain liable for all obligations to Us under this Agreement before the effective date of the transfer and will sign all instruments We reasonably request to evidence these liabilities;
- (viii) At the transferee's expense, the transferee completes the Anago Orientation Program then in effect for new Unit Franchisees upon all terms We reasonably require;
- (ix) We are satisfied that the proposed terms of sale or other factors involved in the transfer do not materially reduce the potential ability of the transferee effectively to assume and carry out his or her obligations under this Agreement; and
- (x) The transferee must sign Our then-current franchise agreement, which may contain terms materially different than this Agreement; and
- (xi) Our approval of any transfer is not a waiver of any future right to approve later transfers.
We have no duty to consider these factors and approval of a proposed tran
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the rights and duties within the franchise agreement are personal to the franchisee, and Anago has granted the franchise based on the franchisee's skills, reputation, aptitude, and financial capacity. Therefore, a franchisee needs Anago's prior written consent to transfer any direct or indirect interest in the agreement, any account assigned to them, or the unit franchise itself. Anago has the sole discretion to grant or withhold this consent.
However, there are exceptions where written consent is not required. These include a transfer of less than 5% interest in a publicly held corporation or a transfer of interest to another original shareholder or partner. Notably, a transfer of 25% or more of the voting or ownership interests in the franchisee's corporation, partnership, or LLC is considered a transfer of interest in the agreement, requiring consent. Any transfer that violates the agreement is void and constitutes an event of default.
To obtain Anago's consent for a transfer, the transferee must meet several conditions. The transferee must interview at Anago's principal office at their own expense and demonstrate that they possess the necessary business and personal skills, reputation, and financial capacity. They must also satisfactorily complete Anago's application process and demonstrate their ability to comply with all obligations under the franchise agreement. Additionally, the transferee must complete the Anago Orientation Program at their own expense and sign Anago's current franchise agreement, which may contain materially different terms. The transferee also needs to pay a transfer fee of the greater of $2,000 or 10% of the sales price, although this fee is waived for transfers to a spouse or child, who instead pay a $250 administrative fee. Anago must also be satisfied that the terms of sale do not reduce the transferee's ability to fulfill the obligations under the agreement.
Anago's approval of a transfer does not waive any future rights to approve later transfers, nor does it indicate an opinion on the fairness of the transfer terms or the transferee's potential success. The original franchisee remains liable for all obligations before the transfer, and Anago's consent does not waive any claims against the franchisee or the right to demand the transferee's compliance with the agreement.