Is Anago obligated to enforce any provision of the Unit Franchise Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 3.5 - Obligations to Unit Franchisees
- (a) Subfranchisor will perform all of the obligations of Subfranchisor under each Unit Franchise Agreement to which it is a party.
- (b) Subfranchisor shall bear the sole responsibility for reviewing, approving and allocating all potential areas of operation ("Unit Area of Operation") for each Unit Franchisee in the Area under each Unit Franchise Agreement. Subfranchisor shall indemnify Franchisor with respect to any selection or designation of any Unit Area of Operation.
- (c) Subfranchisor will conduct periodic meetings of all Unit Franchisees in the Area including meetings of any Regional Advertising Cooperative for purposes as, and no less frequently than, Franchisor may require in writing. If requested by Franchisor, Subfranchisor will develop specific marketing programs for the Area using material provided or approved by Franchisor.
- (d) Subfranchisor recognizes that as a material obligation under this Agreement, it shall ensure that each Unit Franchisee within the Area is operated strictly in accordance with the standards of the System as set forth in the Unit Franchise Agreement and in the Anago Manuals. Subfranchisor shall comply with Franchisor's policies and procedures in monitoring such compliance, which policies and procedures may be amended by Franchisor from time to time. Such monitoring procedures may include without limitation, Unit inspections.
- (e) Subfranchisor shall take all steps reasonably necessary to enforce all Unit Franchisees' obligations under the Unit Franchise Agreement in the Area. If Franchisor or its Affiliates incur expenses to enforce or defend a Unit Franchise Agreements in the Area, Subfranchisor shall reimburse Franchisor for all costs and expenses incurred by Franchisor in any such enforcement actions, including, without limitation, arbitration or mediation fees, court costs, reasonable attorneys' fees and travel expenses.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the subfranchisor has a material obligation to ensure that each Unit Franchise within the Area is operated strictly in accordance with the standards of the Anago System, as detailed in the Unit Franchise Agreement and the Anago Manuals. The subfranchisor must comply with Anago's policies and procedures for monitoring compliance, which may include unit inspections and can be amended by Anago.
Furthermore, the subfranchisor is required to take all reasonably necessary steps to enforce the obligations of all Unit Franchisees under the Unit Franchise Agreement within their designated area. This includes ensuring that franchisees adhere to the standards and guidelines set forth by Anago.
If Anago or its affiliates incur expenses to enforce or defend a Unit Franchise Agreement in the Area, the subfranchisor is obligated to reimburse Anago for all associated costs and expenses. These expenses include, but are not limited to, arbitration or mediation fees, court costs, reasonable attorneys' fees, and travel expenses. This provision highlights the financial responsibility placed on the subfranchisor to ensure compliance and enforcement within their area.