Does the definition of 'Business Assets' for Anago include accounts receivable?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Debtor grants to Secured Party a first priority security interest in Debtor's Business Assets (the "Collateral"). For purposes of this Agreement, Debtor's "Business Assets" shall mean: (a) all of Debtor's accounts receivable arising out of, or in connection with, the operation of Debtor's Anago Subfranchise Business, existing as of the date of this Agreement and which come into existence during the Term of the Anago Subfranchise Rights Agreement by and between Debtor and Secured Party, including notes, negotiable instruments, contracts and the Unit Franchisee obligations for the payment of money, all client accounts and their account receivables, all proceeds owing from trips, clubs, parties, lessons, video studies and any other services or activities connected with the operation of the Subfranchise Business (the "Accounts Receivable"); (b) all books and records pertaining to the Debtor's Accounts Receivable; (c) all equipment, furniture and fixtures located at any owned or controlled site of Debtor; (d) all contracts related to each and every Business within the Area including all Anago Unit Franchise Agreements, promissory notes and any leases to which Debtor is a party; (e) all intangible rights related to this Agreement and the Subfranchise Business; and (f) all proceeds upon sale or other disposition of any of the foregoing. The capitalized terms in this Agreement shall have the meanings defined herein and in the Subfranchise Rights Agreement by and between Debtor and Secured Party.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the definition of 'Business Assets' does include accounts receivable. Specifically, the document states that 'Business Assets' include all of the Debtor's accounts receivable arising out of, or in connection with, the operation of Debtor's Anago Subfranchise Business. This includes accounts receivable existing as of the date of the agreement and those that come into existence during the term of the Anago Subfranchise Rights Agreement.
Furthermore, the definition encompasses notes, negotiable instruments, contracts, and the Unit Franchisee obligations for the payment of money. It also includes all client accounts and their account receivables, as well as all proceeds owing from trips, clubs, parties, lessons, video studies, and any other services or activities connected with the operation of the Subfranchise Business. These items are collectively referred to as the 'Accounts Receivable'.
This definition is important for a prospective Anago franchisee because it clarifies what assets Anago considers to be part of the business. This is particularly relevant in the context of security interests, where Anago may be granted a first priority security interest in these assets as collateral. Understanding the scope of 'Business Assets' helps a franchisee understand the full extent of their obligations and the assets that could be at risk in the event of non-compliance with the franchise agreement.