What is the monthly royalty fee that an Anago subfranchisor must pay to the franchisor?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
reement, except if Subfranchisor is not accepted by Franchisor at its home office within 30 days from the Agreement Date or except as provided in Subsection 2.1(b).
Section 4.2 - Ongoing Payments to Franchisor
- (a) Royalty Fee. During the Term, Subfranchisor will pay to Franchisor a monthly royalty fee ("Royalty Fee") by the 20th day of each month equal to 5% of the previous calendar month's Gross Revenues. Subfranchisor acknowledges and agrees that its payment of Royalty Fees to Franchisor is subject to a monthly minimum equal to the greater of: (i) 5% of the previous month's Gross Revenues generated by Subfranchisor and the
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, subfranchisors are required to pay a monthly royalty fee. This royalty fee is 5% of the previous calendar month's Gross Revenues, payable by the 20th of each month.
However, Anago specifies a minimum monthly royalty payment. This minimum is the greater of either 5% of the previous month's Gross Revenues generated by the subfranchisor and their unit franchisees, or a flat $1,500 per month. This $1,500 minimum kicks in starting the 13th month of operation.
Furthermore, the minimum monthly royalty increases by an additional $1,500 each year after the initial 13th month. This escalating minimum royalty payment means that the subfranchisor's royalty obligations will increase over time, regardless of their actual revenues.