What is the length of the initial term for an Anago Subfranchise Rights Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 14 - TERM
Section 14.1 - Term
The Term of this Agreement runs for 10 years from the Agreement Date, unless sooner terminated as provided in this Agreement. The conditions under which Subfranchisor will have the opportunity of obtaining a Successor Anago Subfranchise Rights Agreement at the expiration of this Agreement are stated in Section 14.2.
Section 14.2 - Option to Obtain Successor Anago Subfranchise Rights Agreement
So long as Subfranchisor is not in material default under this Agreement and each Unit Franchise Agreement and all Unit Franchisees are in reasonable compliance with the terms and conditions of their respective Unit Franchise Agreements, Subfranchisor is hereby granted an option to obtain a Successor Anago Subfranchise Rights Agreement for an additional 10-year term, without an additional franchise fee, however both parties agree that any additional costs due to changes in state, federal or local laws associated with the execution of a Successor Anago Subfranchise Rights Agreement shall be borne by Subfranchisor. The following conditions must be met at the time the option is exercised and immediately before the beginning of the Succeeding Term, unless another time is specified, in order to obtain a Successor Anago Subfranchise Rights Agreement:
(i) Subfranchisor gives Franchisor written notice of Subfranchisor's intention to exercise its option to obtain a Successor Anago Subfranchise Rights Agreement by
submitting an application for a Successor Anago Subfranchise Rights Agreement between 9 months and 12 months before the end of the Term;
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the initial term for the Anago Subfranchise Rights Agreement is 10 years from the agreement date. The agreement date is defined as the date the President of Anago executes the agreement.
A Subfranchisor has the option to obtain a Successor Anago Subfranchise Rights Agreement for an additional 10-year term, provided they are not in material default under the existing agreement and all Unit Franchisees are in reasonable compliance with their agreements. To exercise this option, the Subfranchisor must provide written notice to Anago between 9 and 12 months before the end of the initial term by submitting an application for a Successor Anago Subfranchise Rights Agreement.
The Subfranchisor must also sign and deliver Anago's then-current form of the Anago Subfranchise Rights Agreement within 30 days before the expiration of the initial term, comply with Anago's qualification and training requirements, and execute a general release of all claims against Anago. The successor agreement may contain terms and conditions materially different from the original agreement, but no renewal fee will be charged. The minimum monthly royalty paid to Anago in the successor agreement will not be less than the greater of either the minimum required in the last year of the initial agreement or the average monthly royalty paid during the last year of the initial agreement.