What is the geographic scope of the non-compete restriction for an Anago franchise?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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The parties agree as follows:
ARTICLE 1 - APPOINTMENT
SECTION 1.1 GRANT OF UNIT FRANCHISE.
We grant You the right, and You undertake the obligation, to operate 1 Anago Unit Franchise under the System, subject to the terms of this Agreement.
SECTION 1.2 NO PROTECTED TERRITORY.
You are not obtaining any exclusive or protected territory. You may only operate your Unit Franchise anywhere within the counties of (Your counties) in the state of (Your State) (the "Area") under the name Anago. You cannot operate your Unit Franchise outside the Area. We may open and operate Company Units and franchise the Anago Unit Franchise to other Unit Franchisees or engage in any other method of distribution in Our complete discretion whenever, however and wherever We determine, including within the Area. You must designate your own Premises within the Area from which you will manage and administer Your Unit Franchise. If You do not operate Your Anago Unit Franchise out of Your residence but instead occupy a business premises, such business premises and lease agreement will be subject to our prior written approval, which will not be unreasonably withheld.
SECTION 1.3 NATURE OF RELATIONSHIP.
The parties expressly agree that this Agreement is an independent contractor relationship.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
The 2025 Anago Franchise Disclosure Document states that franchisees are not obtaining any exclusive or protected territory. Anago franchisees may only operate their Unit Franchise anywhere within the counties specified in their agreement in the state designated in their agreement. Franchisees cannot operate their Unit Franchise outside of this designated area.
Anago retains the right to open and operate Company Units, franchise the Anago Unit Franchise to other Unit Franchisees, or engage in any other method of distribution at their discretion, including within the franchisee's designated area. Franchisees must designate their own Premises within the Area from which they will manage and administer their Unit Franchise. If the franchisee does not operate their Anago Unit Franchise out of their residence but instead occupies a business premises, such business premises and lease agreement will be subject to Anago's prior written approval, which will not be unreasonably withheld.
In California, the Subfranchise Rights Agreement contains a covenant not to compete that extends beyond termination of the franchise. This provision may not be enforceable under California law.