In the event of a breach or threatened breach of the Anago Unit Franchise Agreement, is Anago required to demonstrate actual damages to be entitled to an injunction or specific performance?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
for any of Our Designees, nothing in this Agreement is intended to relieve or discharge the obligation of any third persons to any party to this Agreement, nor will any provision give any third persons any right of subrogation or action over or against any party to this Agreement. However; Franchisee acknowledges and agrees that AFI is an intended third-party beneficiary of this Agreement, including without limitation, the provisions of this Agreement which relate to dispute resolution and payment of fees by Unit Franchisee to Subfranchisor, and that AFI has the right (but not the obligation) to enforce any provision of this Agreement as though it were a party hereto.
SECTION 18.21 EQUITABLE RELIEF.
You agree that the Anago Unit Franchise is intended to be 1 of a large number of businesses identified by the Proprietary Marks in selling to the public the products and services associated with the Proprietary Marks, and therefore the failure on the part of a single Unit Franchisee to comply with the Terms of his or her Unit Franchise Agreement is likely to cause irreparable damage to Us and damages
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, in the event of a breach or threatened breach of the Unit Franchise Agreement, Anago is entitled to an injunction or specific performance without having to show or prove any actual damage. This is outlined in Section 18.21, which states that failure to comply with the terms of the Unit Franchise Agreement by a single Unit Franchisee is likely to cause irreparable damage to Anago.
This means that if a franchisee violates the terms of their agreement, Anago can seek a court order to stop the breach or enforce specific performance of the agreement without needing to demonstrate financial harm. Additionally, Anago is entitled to recover reasonable attorneys' fees and costs incurred in obtaining this equitable relief. This equitable remedy is in addition to any other rights Anago has due to the breaches of the agreement.
Anago is entitled to seek this relief without posting any bond or security. However, if a bond is required by a court, the parties agree that $1,000 is a sufficient bond. This clause provides Anago with a significant legal advantage, making it easier and less costly for them to enforce the franchise agreement and protect their brand.
For a prospective franchisee, this clause highlights the importance of adhering to the terms of the franchise agreement. Any deviation, even without causing demonstrable financial damage to Anago, could lead to legal action. The relatively low bond amount of $1,000, if required, further underscores the potential ease with which Anago can pursue legal remedies.