What happens if I fail to schedule the minimum number of Client Bids that Anago requires?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Under your Anago Subfranchise Rights Agreement, you will be licensed and granted the right to operate your Subfranchise in those counties as defined in the Anago Subfranchise Rights Agreement (the "Area") during the term of the Subfranchise Rights Agreement so long as you are not in default of the agreement. The area granted will include a population delineated by the boundaries of a standard, statistical metropolitan area, sufficient to encompass the specified
population (with a minimum population of 500,000), in accordance with the Subfranchise Program purchased. You and we will agree on the defined Area prior to signing the Anago Subfranchise Rights Agreement. However, if you fail to schedule the minimum number of Client Bids that we require then, in addition to our other rights under the Subfranchise Rights Agreement, we may reduce or redefine the Area upon notice to you.
Source: Item 12 — TERRITORY (FDD pages 36–38)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if a subfranchisee fails to schedule the minimum number of client bids required by Anago, Anago has the right to reduce or redefine the subfranchisee's Area. This is in addition to any other rights Anago has under the Subfranchise Rights Agreement. The Area is defined in the Anago Subfranchise Rights Agreement and will include a population delineated by the boundaries of a standard, statistical metropolitan area, sufficient to encompass the specified population (with a minimum population of 500,000), in accordance with the Subfranchise Program purchased. The subfranchisee and Anago will agree on the defined Area prior to signing the Anago Subfranchise Rights Agreement.
This means that if a subfranchisee consistently underperforms in securing client bids, Anago can decrease the geographic territory in which the subfranchisee is authorized to operate. This could significantly impact the subfranchisee's potential revenue and growth opportunities, as a smaller territory inherently limits the number of potential clients they can pursue. The FDD does not specify how much the area may be reduced by.
It is important to note that the territory granted to Anago subfranchisees is not exclusive, and they may face competition from other franchisees, company-owned outlets, or other channels of distribution. This condition regarding client bids adds another layer of performance-based criteria that subfranchisees must meet to maintain their territory. Prospective franchisees should carefully consider the implications of this requirement and ensure they have a solid plan for generating sufficient client bids to avoid territory reduction.
Prospective Anago franchisees should inquire about the specific minimum number of client bids required, the consequences of failing to meet this requirement, and the criteria used to determine how the Area will be reduced or redefined. Understanding these details is crucial for assessing the feasibility and potential profitability of the Anago subfranchise opportunity.