What happens if an Anago subfranchisee breaches confidentiality or non-competition provisions?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
n notice from us of the default. | | 5. Appointment of a receiver or custodian; | | |---|---| | 6. Filing for composition with creditors; | | | 7. Judgment of $5,000 | or more remains | | h. "Cause" defined – non-curable defaults | Sections 8.1 and 8.2 | The following defaults may not be cured: 1. Insolvency or general assignment for creditors; 2. Filing in bankruptcy that is not dismissed within 45 days; 3. Adjudication of bankruptcy; 4. Filing for appointment of a receiver or custodian; 5. Appointment of a receiver or custodian; 6. Filing for composition with creditors; 7. Judgment of $5,000 or more remains unsatisfied for 30 days or longer; 8. Execution of levy; 9. Filing of foreclosure suit that is not dismissed within 45 days; 10. Sale of a substantial portion of your assets after levy; 11. Failure to complete training; 12. Knowing or willful violations of laws, rules or regulations, the commission of an illegal act in connection with the sale of a franchise, act of dishonesty, etc.; 13. You or any of your officers, directors, or owners or employees is charged with, pleads guilty or no contest to, or is convicted of a felony, crime or moral turpitude or any other offense that might have a materially adverse affect on the System or the Proprietary Marks; 14. You deny us our right of inspection or audit; 15. Material breach of any obligation to your Unit Franchisees in the Area; 16. You commit any acts involving dishonesty, bad faith, misfeasance, malfeasance, or willful misconduct; 18. Unauthorized assignment or transfer; 19. Breach of confidentiality or non competition provisions of your Subfranchise Rights Agreement; 20. You knowingly maintain false books or records; 21. Repeated complaints from Unit Franchisees in your Area; 22. Failure to achieve Minimum Annual Performance Requirements; 23. Failure to comply with in-term restrictive covenants; | |----------------------------------------------------|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| i. Franchisee's obligations on termination / non renewal | ARTICLE 9, Subsection 10.2(b) and Section 11.2 | You must: 1.
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, breaching the confidentiality or non-competition provisions of the Subfranchise Rights Agreement constitutes a non-curable default. This means that Anago can terminate the agreement with the subfranchisee immediately without providing an opportunity to correct the breach.
This is a serious matter for a prospective Anago subfranchisee. Unlike other defaults that may be curable within 30 days, a breach of confidentiality or non-competition has immediate consequences. This highlights the importance of understanding and strictly adhering to the terms of the Subfranchise Rights Agreement, particularly those related to confidential information and competitive activities.
It is important to note that Anago may terminate the Subfranchise Rights Agreement with cause, and a breach of confidentiality or non-competition is explicitly listed as a cause for termination that cannot be cured. This underscores the significance Anago places on protecting its confidential information and maintaining a competitive balance within its franchise system.