What conditions must be satisfied for Anago to consent to 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, Anago's consent is required for any transfer of interest in the Franchise Agreement, any Account, or the Unit Franchise. Anago may grant or withhold this consent at its sole discretion. However, consent is not required for a transfer of less than a 5% interest in a publicly held corporation or a transfer to one of the original shareholders or partners. A transfer of 25% or more of the voting or ownership interests in a corporation, partnership, or limited liability company is considered a transfer of interest in the Agreement. Any transfer in violation of the agreement is void and constitutes an event of default.
To obtain Anago's consent for a transfer, several conditions must be met. The transferee must pay a transfer fee equal to the greater of $2,000 or 10% of the sales price, in lieu of the initial franchise fee. However, if the transferee is a spouse or child, only a $250 administrative fee is charged. The transferee must also interview at Anago's principal office and demonstrate the necessary business and personal skills, reputation, and financial capacity. The transferee must complete Anago's application process and demonstrate the ability to comply with the obligations under the Franchise Agreement.
Additional conditions include the transferee completing the Anago Orientation Program at their own expense and signing Anago's then-current franchise agreement, which may have materially different terms. Anago must also be satisfied that the terms of the sale do not reduce the transferee's ability to fulfill their obligations under the agreement. Anago's approval of a transfer does not waive any future rights to approve later transfers or any claims against the franchisee. The franchisee remains liable for all obligations to Anago before the transfer date, even if the transfer is approved.
These conditions ensure that any potential transferee meets Anago's standards and is capable of operating the franchise successfully. Prospective franchisees should carefully consider these requirements and the associated costs when planning for a potential transfer of their Anago franchise.