What is the duration of the 'Default Period' during which Anago Franchisor can deposit and hold Client receipts?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
During any period that Subfranchisor is in default of this Agreement, and for 90 days thereafter (the "Default Period"), Franchisor will have the right to deposit and hold in the Anago Escrow Account certain Client receipts (the "Escrow Receipts"), less any funds owed to Franchisor or its affiliates for royalties, 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.
The Escrow Receipts may be held by Franchisor and distributed directly to the Unit Franchisee the Escrow Receipt owed, less amounts due, as delineated in the Unit Franchise Agreement.
Subfranchisor's residual amounts may remain in the Anago Escrow Account for the duration of the Default Period, and may be offset by amounts owed to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the 'Default Period' lasts for 90 days after a Subfranchisor defaults on their agreement. During this time, Anago has the right to deposit and hold client receipts in the Anago Escrow Account.
From these Escrow Receipts, Anago can deduct any amounts owed to them or their affiliates. These deductions can include royalties, accounting fees, service fees (such as bank or credit card fees related to billing and collections), advertising fees, late fees, temporary management fees, interest, and any other payments due.
After deductions, the remaining amounts from the Escrow Receipts may be distributed directly to the Unit Franchisee to whom the receipt is owed, as specified in the Unit Franchise Agreement. Any residual amounts belonging to the Subfranchisor may remain in the Anago Escrow Account for the entire 90-day Default Period and can be used to offset any further amounts owed to Anago.