If an Anago subfranchisee desires to sell their interest, does Anago have a right of first refusal to acquire the subfranchisee's business?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
| m. Conditions for franchisor approval of transfer | Section 7.3 | 1. You are not in default (monetary or non monetary) under any agreement you have with us; 2. You and your owners must sign a general release of all claims against us; 3. You must subordinate any purchase money financing; 4. The transferee must either assume your obligations under the Subfranchise Rights Agreement or, at our election, sign our then current form of Subfranchise Rights Agreement and other ancillary agreements; 5. The transferee must pay a transfer fee of $10,000 in lieu of paying an initial fee; 6. We must interview and approve the transferee; the transferee must meet our educational, managerial and business standards and meet such other criteria as we may then be requiring; and 7. You must demonstrate that all hard copy documents and electronic data, including client contracts and Unit Franchise Agreements, are current. |
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| n.Franchisor's right of first refusal to acquire franchisee's business | Section 7.2 (c) | We have the right of first refusal to purchase your Franchise if you desire to sell or otherwise transfer your interest, right or license. You must provide to us a copy of the bona fide offer to purchase your Anago Subfranchise Rights Business. We will then have 30 days from receipt of written notice of such offer to notify you of our intent to purchase your Anago Subfranchise Rights Business upon the same terms and conditions. If we elect to exercise our right of first refusal, we will have 60 days from when you notify you of our intent to purchase the assets to close on the purchase. |
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, Anago does have the right of first refusal to purchase a subfranchisee's franchise if the subfranchisee desires to sell or transfer their interest, right, or license. To initiate this process, the subfranchisee must provide Anago with a copy of any bona fide offer to purchase their Anago Subfranchise Rights Business.
Upon receiving the offer, Anago has 30 days to notify the subfranchisee of their intent to purchase the Anago Subfranchise Rights Business under the same terms and conditions as the offer received by the subfranchisee. If Anago elects to exercise their right of first refusal, they then have 60 days from the notification date to close on the purchase.
This right of first refusal allows Anago to maintain control over who enters the franchise system and ensures that any transfer aligns with their strategic interests. For a prospective franchisee, this means that selling their Anago franchise is not solely dependent on finding a buyer, but also on Anago's decision to either approve the buyer or purchase the franchise themselves.