Considering the territory granted to an Anago subfranchisee in Item 12, what obligations does the franchisee have regarding site selection as mentioned in Item 9 and detailed in Item 11?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
You must operate your Anago Subfranchise Rights Business from an office location approved by us (the "Premises"), which office must be within your Area (as defined in Item 12). The Premises must be equipped with a business telephone, computer system with Internet access, facsimile and electronic mail capabilities, and computer software that meets our standards and specifications. If you lease the Premises from a third party, you and the landlord for the leased premises must sign and deliver to us a collateral assignment of your rights under the lease for the premises in the form attached to your Anago Subfranchise Rights Agreement as Exhibit X. Under the collateral assignment agreement, you must, at our option, assign all of your rights under the lease to us upon termination or expiration of your Anago Subfranchise Rights Agreement.
In approving your site, we consider the location of your proposed office, ease of access, location of competitive businesses and the cost and condition of the facility in which the proposed office is to be located.
You must secure your Premises within 90 days of signing your Subfranchise Rights Agreement. If you fail to do so, we have the right to terminate your Subfranchise Rights Agreement.
Time Between Signing of Anago Subfranchise Rights Agreement and the Opening of the Anago Subfranchise Rights Business
The typical length of time between the earlier of signing of the Subfranchise Rights Agreement or first payment of consideration for the Anago Subfranchise Rights Business and the opening of the Anago Subfranchise Rights Business varies from 1 to 3 months. The factors that affect this time frame usually include the time when you receive and complete the Anago Training Program to our satisfaction, the time required to secure your office space, and the time required to register your franchise disclosure document, if necessary. You must commence operation of the Anago Subfranchise Rights Business within 30 days of completing the initial training program, and in any event, within 180 days of signing the Subfranchise Rights Agreement.
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, an Anago subfranchisee must operate their business from an office location approved by Anago, and this office must be within the subfranchisee's designated area as defined in Item 12. The franchisee is responsible for equipping the premises with a business telephone, a computer system with Internet access, a facsimile machine, electronic mail capabilities, and computer software that meets Anago's standards.
If the subfranchisee leases the premises from a third party, both the subfranchisee and the landlord must sign and deliver a collateral assignment of the lease to Anago. This agreement allows Anago, at its option, to assume all rights under the lease upon termination or expiration of the Subfranchise Rights Agreement. Anago considers factors such as the location of the proposed office, ease of access, the location of competitive businesses, and the cost and condition of the facility when approving a site.
The subfranchisee is required to secure their premises within 90 days of signing the Subfranchise Rights Agreement. Failure to do so gives Anago the right to terminate the agreement. The typical time between signing the agreement and opening the Anago Subfranchise Rights Business ranges from 1 to 3 months, depending on factors such as completion of the training program, securing office space, and registering the franchise disclosure document, if necessary. The subfranchisee must commence operations within 30 days of completing the initial training program and, in any event, within 180 days of signing the Subfranchise Rights Agreement.
These site selection and operational requirements are fairly typical in franchising, as franchisors want to ensure brand consistency and operational efficiency. The collateral assignment of lease is a protective measure for Anago, ensuring they can maintain control over the subfranchise's location even if the subfranchisee defaults or leaves the system. The timelines provided give prospective franchisees a clear expectation of how quickly they need to act to get their business up and running.