Considering the restrictions on suppliers in Item 8, can an Anago franchisee use alternative suppliers if the franchisor-approved supplier is unable to provide the necessary products or services, and what are the conditions?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
cts and services in the Manuals or otherwise in writing.
For any products or services for which we do not then have an approved or designated vendor, you may use any vendor that meets our specifications, as set forth in the Manuals. However, we reserve the right to require you and your Unit Franchisees to purchase or lease computers and all other products or services used or required to be used in your respective businesses only from manufacturers, contractors, distributors, and other suppliers (collectively, "vendors") that we approve or designate and about whom we notify you in the Manuals or otherwise in writing. We may also determine the terms under which vendors provide products or services to your Anago Subfranchise Rights Business and to Anago Unit Franchisees, and the distribution methods for any goods or services provided to or used by vendors of products or services. For any product or service for which we have approved or designated a vendor, you must purchase and require your Unit Franchisees to purchase all such goods and services only from the approved or designated vendor for that product or service, under terms, in the manner, and from the source we designate. In our discretion, there may be only one approved or designated vendor for any particular product or service, and we and our affiliates may be a, or the only, vendor and derive revenue from your and your Units Franchisee's purchases. We and our affiliates may use any such revenue as we or they determine, without restriction. We and our affiliates are not currently approved vendors for any particular product or service, but we do act as the intermediary between you and the designated insurance carrier with respect to the purchase of the required insurance.
In approving suppliers for the System, we typically, but are not required to, require that the
supplier be nationally or regionally recognized, and we may take into any factors that we believe to be relevant, including, for example, the price and quality of the products or services, the vendor's frequency of delivery, the vendor's standards of service and reputation in the community, and the reliability of the supplier. We may concentrate purchases with 1 or more suppliers to obtain, but we do not necessarily guarantee, the lowest prices and/or the best advertising support and/or services for any group of Anago Subfranchisors, Anago Unit Franchisees or company/affiliateowned units within the System. Approval of a supplier may be temporary, pending our additional evaluation of the supplier. If we later disapprove a supplier, we will timely notify you in writing of the disapproval. You must cease purchasing from that supplier within a reasonable time (but in any event, within 30 days) after your receipt of our notice of disapproval.
We may, at our option, arrange with certain vendors to collect or have our affiliates collect costs and expenses associated with products and services they provide to you and, in turn, pay the vendor, on your behalf, for such products or services. If we choose to do so, you must allow us or our designated affiliates to auto debit your escrow account for such amounts in the same manner and using the same authorization that you grant us with respect to payment of Royalty and other fees.
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, franchisees are generally required to purchase products and services from approved or designated vendors. However, if Anago does not have an approved or designated vendor for certain products or services, franchisees may use any vendor that meets Anago's specifications as outlined in the manuals.
Anago retains the right to require franchisees to purchase or lease computers and other products/services only from approved or designated vendors. Anago may also determine the terms and distribution methods under which vendors provide products or services. If a vendor is approved or designated for a specific product or service, franchisees must purchase exclusively from that vendor under the terms and manner Anago designates. Anago also has the discretion to have only one approved vendor for a product or service, which could be Anago or its affiliates, who would then derive revenue from these purchases.
If a franchisee wants to use an unapproved supplier, they must submit a written request for approval to Anago, or the supplier can do so. Anago can inspect the supplier's facilities and require samples for testing, with the franchisee bearing the costs of inspection and testing. Anago can also require the supplier to provide evidence of insurance to protect Anago and its franchisees from claims. Anago reserves the right to re-inspect approved suppliers and revoke approval if they fail to meet Anago's standards. Franchisees will be notified in writing within 30 days of a supplier's approval or disapproval.
This system allows Anago to maintain quality control and potentially benefit financially from franchisee purchases through rebates or direct sales. However, it also means franchisees have limited flexibility in choosing suppliers and may be subject to Anago's decisions regarding pricing, service standards, and distribution methods. Franchisees are required to cease purchasing from a disapproved supplier within a reasonable time, but no more than 30 days after receiving notice of disapproval.