What is included in the definition of 'Business Assets' related to an Anago subfranchise?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Debtor grants to Secured Party a first priority security interest in Debtor's Business Assets (the "Collateral"). For purposes of this Agreement, Debtor's "Business Assets" shall mean: (a) all of Debtor's accounts receivable arising out of, or in connection with, the operation of Debtor's Anago Subfranchise Business, existing as of the date of this Agreement and which come into existence during the Term of the Anago Subfranchise Rights Agreement by and between Debtor and Secured Party, including notes, negotiable instruments, contracts and the Unit Franchisee obligations for the payment of money, all client accounts and their account receivables, all proceeds owing from trips, clubs, parties, lessons, video studies and any other services or activities connected with the operation of the Subfranchise Business (the "Accounts Receivable"); (b) all books and records pertaining to the Debtor's Accounts Receivable; (c) all equipment, furniture and fixtures located at any owned or controlled site of Debtor; (d) all contracts related to each and every Business within the Area including all Anago Unit Franchise Agreements, promissory notes and any leases to which Debtor is a party; (e) all intangible rights related to this Agreement and the Subfranchise Business; and (f) all proceeds upon sale or other disposition of any of the foregoing. The capitalized terms in this Agreement shall have the meanings defined herein and in the Subfranchise Rights Agreement by and between Debtor and Secured Party.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the definition of 'Business Assets' for a subfranchise is comprehensive. It includes all accounts receivable tied to the subfranchise's operations, both existing at the agreement date and those generated during the term of the agreement. This encompasses notes, negotiable instruments, contracts, and the obligations of Unit Franchisees to pay money. It also specifically mentions client accounts and their receivables, plus proceeds from activities like trips, clubs, parties, lessons, video studies, and any other services linked to the subfranchise business.
In addition to the accounts receivable, Anago's definition of Business Assets extends to all books and records pertaining to these receivables. It also covers all equipment, furniture, and fixtures located at any site owned or controlled by the subfranchisor. Furthermore, all contracts related to the business within the designated area are included, such as Anago Unit Franchise Agreements, promissory notes, and any leases to which the subfranchisor is a party.
Finally, the definition encompasses all intangible rights associated with the agreement and the subfranchise business, as well as all proceeds from the sale or any other disposition of the aforementioned assets. This broad definition ensures that a wide range of assets are included within the scope of the security interest granted to Anago, providing them with a comprehensive claim on the subfranchise's assets in case of default or other triggering events.