How is the minimum monthly royalty determined in a Successor Anago Subfranchise Rights Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (v) Subfranchisor understands that any Successor Agreement shall contain a provision for the minimum monthly royalty paid to Franchisor to not be less than the greater of either the minimum required in the last year of this agreement or the average monthly royalty paid during the last year of this agreement; and
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the minimum monthly royalty fee in a Successor Anago Subfranchise Rights Agreement will not be less than the greater of two amounts. The first is the minimum monthly royalty required in the last year of the original agreement. The second is the average monthly royalty paid during the last year of the original agreement.
For a prospective Anago subfranchisee, this means that when considering whether to renew their agreement, they should anticipate that their minimum monthly royalty payment could increase. The actual amount will depend on their royalty payments in the final year of their initial term.
This condition is important for financial planning. Subfranchisees should carefully track their royalty payments and project their potential obligations under a successor agreement to ensure they can meet the financial requirements for renewal. Failing to meet these requirements could impact their ability to secure a new agreement.