What deductions are made from the Anago Subfranchisor's client receipts before distribution?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
After Subfranchisor receives a Client payment and deposits that payment into the designated Anago Escrow Account, Franchisor will: (i) distribute to Subfranchisor once per week, on Wednesday, the Client Receipts deposited into the Anago Escrow Account during the prior week (with a week running from Sunday through Saturday) which have cleared, less any funds owed to Franchisor or its affiliates for Royalties, Administrative Support fees, Insurance fees, accounting fees, service fees (bank fees, credit card fees, or other fees relating to billing and collections), advertising fees, late fees, temporary management fees, interest, and any other payments due to Franchisor its affiliates hereunder; and (ii) Franchisor will hold back in the Anago Escrow Account a portion of the funds sufficient to cover amounts Subfranchisor owes to it under this Agreement, as described in subsection (i).
Subfranchisor will be responsible for the payment of sales tax, as applicable, which payments will be made from Subfranchisor's operating account.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, after a Subfranchisor deposits a client payment into the designated Anago Escrow Account, Anago will distribute client receipts to the Subfranchisor weekly, specifically on Wednesdays, for payments that have cleared from the prior week (Sunday through Saturday). However, before distribution, Anago deducts several fees and payments. These deductions include royalties, administrative support fees, insurance fees, accounting fees, service fees (such as bank fees and credit card fees related to billing and collections), advertising fees, late fees, temporary management fees, interest, and any other payments owed to Anago or its affiliates.
Additionally, Anago will hold back a portion of the funds in the Anago Escrow Account to cover any amounts the Subfranchisor owes to Anago under the Subfranchise Agreement. This holdback ensures that Anago can satisfy any outstanding financial obligations of the Subfranchisor. The Subfranchisor is responsible for paying sales tax from their operating account, not from the escrow account.
In the event the Subfranchisor defaults on the agreement, Anago has the right to deposit and hold client receipts in the Anago Escrow Account during the default period, which lasts for the period of default and 90 days thereafter. From these escrow receipts, Anago will deduct the same fees as mentioned above (royalties, accounting fees, service fees, advertising fees, late fees, temporary management fees, interest, and any other payments due). The remaining funds may then be distributed directly to the Unit Franchisee who is owed the payment, less any amounts due as outlined in the Unit Franchise Agreement. Any residual amounts belonging to the Subfranchisor may remain in the Anago Escrow Account during the default period and may be offset by amounts owed to Anago.