Can Anago increase the advertising contribution?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor has the right to establish national and/or regional advertising funds and/or regional advertising cooperatives (hereinafter collectively referred to as the "Fund") for the common benefit of the Anago franchise System.
If a Fund is established, Franchisor may require Subfranchisor to contribute a monthly amount not to exceed 2.2% of Subfranchisor's Gross Revenues during the preceding month to the Fund.
The Fund will not be Franchisor's asset.
The Fund is not a trust.
If established, Subfranchisor's payments to the Fund shall be used for advertising, marketing, promotion, production and development of advertising, marketing, promotional and other programs, product development, merchandising, public relations, administrative expenses, programs designed to increase business and enhance and further the public reputation of the Anago franchise System, and activities related to any or all of the foregoing.
The content of all activities of the Fund, including, without limitation, the media selected and employed, as well as the area and units to be targeted for such activities shall be at the sole discretion of Franchisor.
Franchisor does not owe any fiduciary obligation to Subfranchisor or Unit Franchisees for administering the Fund or any other reason.
Franchisor undertakes no obligation to make expenditures for Subfranchisor or any individual Unit Franchisee which are equivalent or proportionate to contributions paid under this Agreement, or to insure that Subfranchisor or any unit Franchisee benefits directly or on a pro-rata basis from activities of the Fund, if any.
Franchisor has the right to include a notation on all advertisements stating the availability of franchise and/or career opportunities.
A statement of operations of the Fund, if developed, will be prepared annually by an independent public accountant selected by Franchisor.
Upon reasonable request, Franchisor will provide Subfranchisor a copy of the annual statement of operations.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago has the right to establish national and/or regional advertising funds for the benefit of the Anago franchise system. If such a fund is established, Anago may require subfranchisors to contribute a monthly amount, but this amount cannot exceed 2.2% of the subfranchisor's gross revenues from the preceding month. This contribution is allocated to the Fund.
The funds collected are to be used for advertising, marketing, promotion, production and development of advertising, marketing, promotional and other programs, product development, merchandising, public relations, administrative expenses, programs designed to increase business and enhance and further the public reputation of the Anago franchise System, and activities related to any or all of the foregoing. The content of all activities of the Fund, including, without limitation, the media selected and employed, as well as the area and units to be targeted for such activities shall be at the sole discretion of Anago.
Anago does not have a fiduciary obligation to subfranchisors or unit franchisees for administering the Fund. Anago also does not have any obligation to make expenditures for subfranchisors or any individual unit franchisee which are equivalent or proportionate to contributions paid under the agreement, or to ensure that a subfranchisor or any unit franchisee benefits directly or on a pro-rata basis from activities of the Fund. A statement of operations of the Fund, if developed, will be prepared annually by an independent public accountant selected by Anago. Upon reasonable request, Anago will provide the subfranchisor a copy of the annual statement of operations.
In practical terms, this means that while Anago can mandate contributions to an advertising fund, the contribution is capped at 2.2% of gross revenues. The franchisee has a right to request a copy of the fund's annual statement of operations to see how the money is being spent. However, Anago has sole discretion over how the fund is used and is not obligated to ensure that each franchisee benefits directly from the advertising. This arrangement is fairly typical in franchising, where franchisors control marketing funds to ensure brand consistency and maximize system-wide impact.