What is considered a transfer of interest in the Anago franchise if it involves voting or ownership interests?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
A transfer of 25% or more of the voting or ownership interests in Your corporation, partnership or limited liability company, individually or in the aggregate, directly or indirectly, is, for all purposes of this Agreement, considered Your transfer of an interest in this Agreement. Any purported transfer by You, by operation of law or otherwise in violation of this Agreement, is void and is an Event of Default.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a transfer of 25% or more of the voting or ownership interests in a franchisee's corporation, partnership, or limited liability company is considered a transfer of interest in the Anago franchise. This applies whether the transfer is done individually or in the aggregate, directly or indirectly.
This provision means that if a franchisee who operates as a corporation, partnership, or LLC sells or transfers a significant portion (25% or more) of the ownership or voting rights in their business, Anago considers it the same as transferring the franchise itself. This triggers the transfer requirements outlined in the franchise agreement, including the need for Anago's approval.
This is a fairly standard clause in franchise agreements. Franchisors want to maintain control over who is operating their franchises, and this provision prevents a franchisee from effectively selling the business to someone else without the franchisor's consent. Anago needs to approve the transfer, and any transfer without their approval is void and constitutes a default of the agreement.