factual

Does Anago have a cure period for defaults related to payments or other agreements?

Anago Franchise · 2025 FDD

Answer from 2025 FDD Document

il to complete corrective measures classes with 90 days of notice to

attend corrective measures classes;

  • (l) If You stop service to contracts assigned to You and decline all subsequent offers of contracts by Anago for a period of 360 days after the last date of service to an Anago Client ; or
  • (m) If Anago is unable to contact You because You have vacated Your premises and failed to inform the local Anago office pursuant to Section 8.4 of this Agreement.

SECTION 11.4 TERMINATION BY US - AFTER NOTICE AND RIGHT TO CURE.

If You are in default We may, at Our option, terminate all rights granted to You under this Agreement effective upon delivery of notice to you, following an opportunity to cure the default, as follows: (a) if a serious or imminent threat or danger to public health or safety results from the construction, maintenance or operation of the Anago Unit Franchise and the threat or danger remains uncorrected for 5 days after Your receipt of written notice from Us or a governmental authority. If a cure cannot be reasonably completed in this time, then all reasonable steps to cure must begin within this time, but a cure must be completed promptly within 30 days after receipt of written notice; (b) You violate any health, safety, or sanitation law, ordinance, or regulation and do not correct the failure or refuse to do so within 3 days after written notice from Us or a governmental authority. If a cure cannot be reasonably completed in this time, then all reasonable steps to cure must begin within this time, but a cure must be completed within 30 days after receipt of written notice; and (c) except as otherwise provided above, You have 30 days after delivery from Us of a written Notice of Default specifying the nature of the default to remedy any default other than as stated above, and provide evidence of cure satisfactory to Us.

If any default is not cured within the applicable cure period, or any longer time as applicable law requires, all Your rights under this Agreement terminate without additional notice to You effective immediately upon the expiration of the applicable cure period or any longer time as applicable law requires. In addition to the Events of Default specified in Sections 11.2, 11.3 and 11.4, an Event of Default occurs if You fail to comply with any of the requirements imposed by this Agreement, as it may be revised or supplemented by the Manual, or to carry out this Agreement in good faith. You have the burden of proving You properly and timely cured any default, to the extent a cure is permitted under this Agreement.

ARTICLE 12 - YOUR OBLIGATIONS UPON TERMINATION OR EXPIRATION

Upon the termination or expiration of this Agreement, the Sections of ARTICLE 12 apply to the rights and obligations of the parties.

SECTION 12.1 CEASE OPERATIONS.

You will immediately cease to operate the Anago Unit Franchise using the Proprietary Marks or System. You will not, directly or indirectly, use any of the Proprietary Property nor represent yourself as a present or former Unit Franchisee of Us or in any other way affiliate yourself with the System. You will immediately cease using all stationery, signage and other materials containing the Proprietary Marks.

You will cease and desist from using websites, social media accounts, and other printed and electronic identifiers associated with the Unit Franchise or with which the Unit Franchise has been identified. On request, You will direct all persons responsible for or controlling such identifiers to transfer them to Us.

SECTION 12.2 PAYMENT OF OUTSTANDING AMOUNTS.

We may retain all fees paid under this Agreement except for refunds expressly required in this Agreement. In addition, within 10 days after the effective date of the termination or expiration, or any later dates as We determine that amounts are due to Us, You must pay to Us all amounts owed to Us, Our Affiliates and Your other creditors that are then unpaid.

SECTION 12.3 DISCONTINUANCE USE OF NAME.

You will cancel any fictitious, trade or assumed business name registration that contains the Proprietary Marks or any other of Our trademarks, trade names or service marks or colorable imitation thereof. You will furnish Us with evidence of compliance with this obligation to cancel the registration within 30 days after termination or expiration of this Agreement. If You fail to cancel, You appoint Us as Your attorney-in-fact to do so for You and will pay all costs to Us associated with such cancellation.

SECTION 12.4 UNFAIR COMPETITION.

You agree, if You continue to operate or later begin to operate any other business, not to use any reproduction or colorable imitation of the Proprietary Marks, methods of operation or undertake any other conduct either in any other business or the promotion of any other business, that is likely to cause confusion, mistake or deception, or that is likely to dilute Our rights in and to the Proprietary Marks. In addition, You agree not to utilize any designation of origin or description or representation that falsely suggests or represents an association or connection with AFI, Us or any of Our affiliates. This Section does not relieve, directly or indirectly, Your obligations under ARTICLE 13.

SECTION 12.5 RETURN OF MATERIALS

You will immediately deliver to Us all tangible Proprietary Property and all other physical property containing the Proprietary Marks in Your possession or control, and all copies and any other forms of reproductions of these materials unless instructed by Us to instead destroy those materials. You agree that all these materials are Our exclusive property.

SECTION 12.6 RETURN OF EQUIPMENT.

You will return any loaned equipment or You may retain equipment by paying all unpaid lease payments through the end of the lease.

Source: Item 23 — RECEIPTS (FDD pages 62–298)

What This Means (2025 FDD)

According to Anago's 2025 Franchise Disclosure Document, Anago franchisees typically have an opportunity to cure defaults, although there are exceptions. For most defaults, Anago provides a 30-day cure period after delivering a written Notice of Default. During this time, the franchisee must remedy the default and provide satisfactory evidence of the cure to Anago. However, the availability and terms of a cure period can vary based on the nature of the default and, potentially, applicable law. The franchisee bears the burden of proving that they properly and timely cured any default, assuming a cure is permitted under the agreement.

There are specific instances where Anago may terminate the franchise agreement immediately without offering an opportunity to cure. These include situations where the franchisee ceases performing contracted services for more than three consecutive days without Anago's consent, fails to comply with cleanliness or sanitation standards, or is convicted of a felony or crime that could negatively impact the Anago system. Immediate termination can also occur if the franchisee denies Anago the right to inspect the franchise or audit records, engages in harmful conduct, or misuses Anago's proprietary property. Receiving three or more default notices for similar issues within a 12-month period, even if cured, can also lead to termination without a cure period.

For Subfranchisors, Section 8.3 outlines a similar 30-day cure period after receiving a written Notice of Default from Anago for most defaults. However, similar to the franchisee agreement, this cure period does not apply in all situations, as specified in Sections 8.1 and 8.2. The Subfranchisor also has the burden of proving they properly and timely cured any default, to the extent a cure is permitted under the agreement. Furthermore, a cross-default provision states that a default in any agreement between the Subfranchisor and Anago or its affiliates constitutes a breach of the franchise agreement, potentially leading to termination without the standard cure period.

Prospective franchisees should be aware of the specific conditions that trigger immediate termination versus those that allow for a cure period. Understanding these distinctions is crucial for maintaining compliance and protecting their investment in the Anago franchise. Franchisees should also note that even if a default is cured, repeated defaults can still lead to termination without an opportunity to cure.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.