Are leases to which the Anago Subfranchisor is a party considered Business Assets?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, leases to which the Subfranchisor is a party are considered Business Assets. Specifically, the document defines "Business Assets" in the context of a security interest granted by the Debtor (Subfranchisor) to the Secured Party (Anago Franchising, Inc.).
The "Business Assets" include "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." This means that any leases the Anago Subfranchisor has entered into are part of the collateral securing their obligations to Anago Franchising, Inc.
This has significant implications for a prospective Anago Subfranchisor. It means that these leases can be subject to a security interest, potentially affecting the Subfranchisor's ability to assign, amend, or terminate them without the Franchisor's consent. The Franchisor has a secured interest in these leases, which could impact the Subfranchisor's operational flexibility and financial obligations related to those leases.