What is the minimum monthly royalty payment provision in any Successor Anago Agreement?

According to Anago's 2025 Franchise Disclosure Document, a Subfranchisor seeking a Successor Anago Subfranchise Rights Agreement must understand that the agreement will contain a provision for the minimum monthly royalty paid to Anago. This minimum monthly royalty will not be less than the greater of either the minimum required in the last year of the current agreement or the average monthly royalty paid during the last year of the current agreement.

For a prospective Anago subfranchisee, this means that when considering renewing their agreement, they should anticipate that their minimum monthly royalty payment could be adjusted based on their previous year's royalty payments. If the minimum royalty required in the last year of the agreement is higher than the average monthly royalty paid, the subfranchisee will pay that higher amount. Conversely, if the average monthly royalty paid is higher, that amount will become the new minimum.

This provision ensures that Anago maintains a consistent revenue stream while also accounting for the subfranchisee's performance over the preceding year. It is important for subfranchisees to factor this potential change into their financial planning when approaching the renewal of their franchise agreement. Subfranchisees should carefully review their royalty payments from the last year of their agreement to accurately project their future minimum monthly royalty obligations under the Successor Anago Subfranchise Rights Agreement.