For how long after written notice of default can Anago deduct amounts owed from client receipts?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) We may for a period of one year after written notice of default, as described in Subsection 2.4(f)(i) of the Subfranchise Rights Agreement immediately deduct from amounts paid to you on your client receipts, any amounts owed us.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago has the right to deduct amounts owed from client receipts for up to one year after providing written notice of default. Specifically, Anago can deduct any amounts owed to them from the payments made to the franchisee based on client receipts.
This provision in the Subfranchise Rights Agreement allows Anago to recover outstanding debts from the franchisee by offsetting them against the franchisee's earnings. This measure is in place to protect Anago's financial interests in the event of a franchisee's default.
For a prospective Anago franchisee, this means that if they fail to meet their obligations under the Subfranchise Rights Agreement, Anago can take direct action to recoup any losses by withholding payments. It is important for franchisees to understand the conditions that constitute a default and the potential financial consequences, including this deduction from client receipts. Franchisees should maintain open communication with Anago to address any financial difficulties and avoid default situations.