When are the franchise fees recognized as revenue by Anago?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
using
the same authorization that Subfranchisor grants Franchisor with respect to payment of Royalty and other fees.
ARTICLE 4 - SUBFRANCHISE FEE AND COMPENSATION
Section 4.1 - Subfranchise Fee
Subfranchisor will pay to Franchisor a Subfranchise Fee in the amount of $98,000. The Subfranchise Fee is fully earned by Franchisor and is non-refundable upon signing this Agreement in consideration for the administrative and other costs incurred by Franchisor and opportunities lost or
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the subfranchise fee of $98,000 is considered fully earned and non-refundable by Anago upon signing the agreement. This is in exchange for administrative and other costs incurred by Anago, as well as opportunities lost or deferred due to the rights granted to the subfranchisor.
This means that once the subfranchise agreement is signed, Anago recognizes the entire $98,000 as revenue, regardless of whether the subfranchisor has begun operations or generated any income. The only exceptions to this policy are if the subfranchisor is not accepted by Anago at its home office within 30 days from the agreement date, or as provided in Subsection 2.1(b).
For a prospective subfranchisor, this implies that the $98,000 subfranchise fee is a sunk cost once the agreement is signed. It is therefore crucial to carefully evaluate the opportunity and conduct thorough due diligence before committing to the Anago franchise. Understanding the conditions under which a refund might be possible, such as failing the home office acceptance within 30 days, is also important.