If an owner of an Anago franchise is convicted of a felony, can Anago terminate the franchise agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
of Your real or personal property used in the Anago Unit Franchise is sold after levy by any sheriff, marshal or constable.
- (b) You will notify Us within 3 days of the occurrence of any of the events described in Subsection 11.2(a).
- (c) If at any time the Subfranchise Rights Agreement is terminated, this Agreement will also terminate; provided, however, that AFI may in its sole discretion, and upon notice to you, assume Our rights and obligations under this Agreement.
SECTION 11.3 TERMINATION BY US - AFTER NOTICE.
If You are in default We may, at Our option, terminate all rights granted to You under this Agreement, without affording You an opportunity to cure the default, effective immediately upon notice to You, upon the occurrence of any of the following Events of Default:
- (a) If You c
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago has the option to terminate the franchise agreement without allowing an opportunity to cure the default if the franchisee, or their officer, director, owner, or managerial employee is convicted of a felony. This termination is effective immediately upon notice.
However, this is conditional. Anago can only terminate the agreement if they reasonably believe the crime is likely to have a material adverse effect on the Anago system, its proprietary property, the goodwill associated with the property, or Anago's interest in any of the proprietary property. The franchisee can prevent termination if they immediately and legally terminate the individual as an officer, director, owner, and employee.
This clause protects Anago's brand and reputation. Franchise agreements often include clauses allowing termination for criminal convictions, particularly those that could damage the brand's image or the relationship with customers. The franchisee needs to be aware that their actions, and the actions of those in leadership positions within their franchise, could have serious consequences for their franchise agreement.