If an Anago franchisee is required to use specific computer systems (Item 8), who is responsible for maintaining and updating those systems, and what are the associated costs?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
a) the preparation of advertising brochures, (b) compiling a list of local suppliers, (c) compiling a list of prospective clients, and (d) the set up for local advertising for the Unit Franchisees.
- (b) Computer System/Software. Subfranchisor must provide financial and business records and other information to Franchisor according to reporting formats, methodologies and time schedules that Franchisor establishes. As part of these record-keeping requirements, Franchisor requires Subfranchisor, at its sole cost and expense, to obtain and use the computer hardware and software system (including Franchisor's proprietary software) as designated by Franchisor from time to time in the day-to-day operation of Subfranchisor's business. Currently, Subfranchisor is required to install the computerized NBDS management systems and accept the NBDS (in accordance with the NBDS License Agreement attached as Exhibit D to the FDD) which may be modified at any time by in response to business, operations and marketing conditions. Subfranchisor shall enter into any software licenses, terms of use and software maintenance agreements and pay any license and maintenance fees required by Franchisor or its Affiliates. Subfranchisor shall replace any such systems when deemed advisable by Franchisor given the age, cost to operate, condition of the system then in use, the then-current and anticipated technology, the information then in use with other Subfranchisors of the System, the needs of the System, and any other factors that may be relevant. If the Subfranchisor voluntarily fails to use the computer system and Anago proprietary software as directed by the Franchisor it will be a material breach under this agreement that the Franchisor at its option may terminate this agreement.
Section 2.4 - Billing and Collection System
(a) Invoicing. Under the Unit Franchise Agreements, each Unit Franchisee appoints Subfranchisor as its agent for purposes, throughout the term of the Unit Franchise Agreement, of billing and collecting for services the Unit Franchisee provides to its Clients. Subfranchisor hereby delegates to Franchisor the performance of those services, utilizing the NBDS System or such other program as designated by Franchisor as described in this Section 2.4.
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Subfranchisors are responsible for the costs associated with maintaining and updating required computer systems. Anago requires its Subfranchisors to obtain and use designated computer hardware and software systems, including Anago's proprietary software, for day-to-day business operations. Currently, Subfranchisors must install the computerized NBDS management systems and accept the NBDS.
The Subfranchisor is responsible for entering into any software licenses, terms of use, and software maintenance agreements, and for paying any associated license and maintenance fees required by Anago or its affiliates. Anago may require the Subfranchisor to replace these systems when deemed advisable due to factors such as age, operating costs, condition, current and anticipated technology, information use among other Subfranchisors, system needs, and other relevant factors. Failure to use the required computer system and proprietary software as directed by Anago constitutes a material breach of the agreement, potentially leading to termination.
Subfranchisors must make reasonable upgrades and updates to their computer systems at Anago's request and at their own expense. While Anago is contractually obligated to provide maintenance and repairs to hardware leased from them under the NBDS License Agreement, the Subfranchisor bears the cost of upgrades and updates to all hardware, which can range from $500.00 to $5,000.00. The initial costs associated with purchasing the computer system range from $15,000 to $25,000. There are no contractual limitations on the frequency and cost of upgrading or updating the computer system.