Does the Anago Franchise Disclosure Document contain all the provisions related to franchise renewal, termination, transfer, and dispute resolution?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION]
| i. Franchisee's obligations on termination / non renewal | ARTICLE 9, Subsection 10.2(b) and Section 11.2 | You must: 1. Comply with the restrictions on competition (see row "r" below); 2. Indemnify us from any losses or damages we sustain as a result of your operation of the Anago Subfranchise Rights Business; 3. Discontinue all use of, and maintain confidentiality of, all our Confidential Information; 4. Cease operating your Anago Subfranchise business; 5. Pay all amounts you owe to us within 10 days; 6. Discontinue use of Proprietary Marks and de-identify your Subfranchise Rights Business; 7. Cease use of the Subfranchise Rights Business' telephone numbers, websites, social media accounts, etc. and transfer such telephone numbers, websites, and social media accounts to us or such other party as we may designate; 8. Assign all Unit Franchises and Unit Franchise Agreements to us; 9. Assign all Clients and Client Accounts to us; 10. Return all Proprietary Property to us; 11. Cease selling Unit Franchises; cease providing services to Unit Franchises; and cease solicitation of Clients; and 12. Cancel assumed, fictitious and trade name registrations. |
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| k. "Transfer" by franchisee - defined | Section 7.2 | Transfer means any sale, assignment, transfer, conveyance or gift, whether voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise, of any direct or indirect interest in your Subfranchise Rights Agreement or in your Anago Subfranchise Rights Business. A transfer to any other original owner of your Anago Subfranchise Rights Business is not considered a transfer; provided that the transferee shall remain bound by the personal guaranty. |
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| m. Conditions for franchisor approval of transfer | Section 7.3 | 1. You are not in default (monetary or non monetary) under any agreement you have with us; 2. You and your owners must sign a general release of all claims against us; 3. You must subordinate any purchase money financing; 4. The transferee must either assume your obligations under the Subfranchise Rights Agreement or, at our election, sign our then current form of Subfranchise Rights Agreement and other ancillary agreements; 5. The transferee must pay a transfer fee of $10,000 in lieu of paying an initial fee; 6. We must interview and approve the transferee; the transferee must meet our educational, managerial and business standards and meet such other criteria as we may then be requiring; and 7. You must demonstrate that all hard copy documents and electronic data, including client contracts and Unit Franchise Agreements, are current. |
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| n.Franchisor's right of first refusal to acquire franchisee's business | Section 7.2 (c) | We have the right of first refusal to purchase your Franchise if you desire to sell or otherwise transfer your interest, right or license. You must provide to us a copy of the bona fide offer to purchase your Anago Subfranchise Rights Business. We will then have 30 days from receipt of written notice of such offer to notify you of our intent to purchase your Anago Subfranchise Rights Business upon the same terms and conditions. If we elect to exercise our right of first refusal, we will have 60 days from when you notify you of our intent to purchase the assets to close on the purchase. |
| o.Franchisor's option | Not applicable | |
| to purchase | ||
| franchisee's | ||
| business | ||
| u.Dispute resolution by arbitration or mediation | ARTICLE 13 | Before initiating arbitration, the initiating party will provide to a notice of intention to initiate arbitrate to the other party, following which, the parties will make commercially reasonable effort to resolve the dispute amicably within 60 days (or such longer deadline as may we and you may mutually upon) of the receiving party's receipt of all information reasonably requested by it. All disputes between the parties that cannot be amicably settled, except for claims relating to Proprietary Marks or other service marks or commercial symbols of Franchisor, shall be determined solely and exclusively by arbitration. Further, Franchisor has the immediate right to secure a court order enjoining any default or threatened breach which could cause irreparable damage to other subfranchised businesses. |
| v.Choice of forum | Section 13.4 | The forum for any disputes shall be in the state or federal court which is closest to our then current principal place of business (currently Pompano Beach, Florida). (Subject to state law. See state specific addenda attached to this Disclosure Document.) |
| w. Choice of law | Section 13.5 | Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051 et seq.), the Subfranchise Rights Agreement is interpreted under the laws of Florida. (Subject to state law. See state specific addenda attached to this disclosure document.) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–52)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Item 17 provides a summary of provisions related to renewal, termination, transfer, and dispute resolution. However, the document explicitly states that prospective franchisees should read the actual agreements attached to the disclosure document for complete details.
Specifically, the FDD outlines the franchisee's obligations upon termination or non-renewal, referencing Article 9, Subsection 10.2(b) and Section 11.2 of the franchise agreement. These obligations include complying with non-competition restrictions, indemnifying Anago from losses, discontinuing the use of confidential information, ceasing business operations, paying outstanding amounts, discontinuing the use of proprietary marks, transferring telephone numbers and websites, assigning unit franchises and client accounts, returning proprietary property, ceasing the sale of unit franchises and client solicitation, and canceling trade name registrations.
Regarding transfer of the franchise, Anago retains the right of first refusal to purchase the franchise if the franchisee desires to sell. If Anago does not exercise this right, the franchisee can transfer the business to a third party, subject to Anago's approval. The conditions for approval include the franchisee not being in default, signing a general release of claims, subordinating purchase money financing, the transferee assuming obligations or signing a new agreement, payment of a $10,000 transfer fee, and the transferee meeting Anago's standards.
In terms of dispute resolution, the Anago FDD specifies that disputes will be resolved through arbitration in Pompano Beach, Florida, after a 60-day period for amicable resolution, excluding claims related to proprietary marks. The agreement is governed by Florida law, except to the extent governed by the United States Trademark Act of 1946. These summaries provide an overview, but the full legal agreements define the complete rights and obligations.