Is Anago obligated to compensate the franchisee for any system improvements ('Innovations') suggested by the franchisee?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (k) Operational Suggestions. Subfranchisor is encouraged to submit suggestions in writing to Franchisor for improving elements of the System, such as products, services, equipment, service format, advertising and any other relevant matters, which will be considered by Franchisor when adopting or modifying standards, specifications and procedures for the System. Subfranchisor agrees that any suggestions made by Subfranchisor under this Agreement are the exclusive property of Franchisor. Franchisor has no obligation to use these suggestions and no obligation to provide compensation for any suggestion. Subfranchisor may not use any suggestions inconsistent with his or her obligations under this Agreement without the written consent of Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago subfranchisors are encouraged to submit suggestions for improving the Anago system. These suggestions can include improvements to products, services, equipment, service format, advertising, and other relevant matters. Anago will consider these suggestions when adopting or modifying standards, specifications, and procedures for the system.
However, the FDD explicitly states that Anago is not obligated to use any suggestions made by subfranchisors. More importantly, Anago has no obligation to provide any compensation to the subfranchisor for any suggestions that are submitted. The franchise agreement specifies that any suggestions made by the subfranchisor become the exclusive property of Anago.
This means that while Anago welcomes input from its subfranchisors, franchisees should not expect any financial reward or guarantee that their ideas will be implemented. This is a fairly standard practice in franchising, where the franchisor maintains control over the brand and system standards. The franchisee benefits from the established system and brand recognition, while the franchisor retains the right to make changes and improvements as they see fit, without necessarily compensating franchisees for their suggestions.