What obligations does an Anago franchisee have regarding computer systems as described in Item 8, and how does this relate to the franchisor's assistance with computer systems mentioned in Item 11?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
nchisor) of the necessary computer operating system (NBDS) for telemarketing, administration, and field operations. These manuals cannot be emulated, edited or altered in whole or in part by Subfranchisor or its Unit Franchisees.
Section 2.3 - Pre-Opening Assistance and Support
- (a) Original Materials. Franchisor will provide Subfranchisor with assistance in (a) the preparation of advertising brochures, (b) compiling a list of local suppliers, (c) compiling a list of prospective clients, and (d) the set up for local advertising for the Unit Franchisees.
- (b) Computer System/Software. Subfranchisor must provide financial and business records and other information to Franchisor according to reporting formats, methodologies and time schedules that Franchisor establishes. As part of these record-keeping requirements, Franchisor requires Subfranchisor, at its sole cost and expense, to obtain and use the computer hardware and software system (including Franchisor's proprietary software) as designated by Franchisor from time to time in the day-to-day operation of Subfranchisor's business. Currently, Subfranchisor is required to install the computerized NBDS management systems and accept the NBDS (in accordance with the NBDS License Agreement attached as Exhibit D to the FDD) which may be modified at any time by in response to business, operations and marketing conditions. Subfranchisor shall enter into any software licenses, terms of use and software maintenance agreements and pay any license and maintenance fees required by Franchisor or its Affiliates. Subfranchisor shall replace any such systems when deemed advisable by Franchisor given the age, cost to operate, condition of the system then in use, the then-current and anticipated technology, the information then in use with other Subfranchisors of the System, the needs of the System, and any other factors that may be relevant. If the Subfranchisor voluntarily fails to use the computer system and Anago proprietary software as directed by the Franchisor it will be a material breach under this agreement that the Franchisor at its option may terminate this agreement.
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, subfranchisees have specific obligations regarding computer systems and software, as detailed in Item 23, Section 2.3. Anago requires subfranchisees to provide financial and business records and other information according to the franchisor's established reporting formats, methodologies, and time schedules. As part of these requirements, subfranchisees must, at their own cost, obtain and use the computer hardware and software system designated by Anago for day-to-day operations. Currently, this includes installing the computerized NBDS management systems and accepting the NBDS, which may be modified by Anago in response to business, operations, and marketing conditions. Subfranchisees must also enter into any software licenses, terms of use, and software maintenance agreements and pay any required license and maintenance fees.
Anago also has the right to require subfranchisees to replace these systems based on factors such as age, cost to operate, condition, current and anticipated technology, information in use with other subfranchisees, the needs of the system, and other relevant factors. Failure to use the computer system and Anago proprietary software as directed by Anago constitutes a material breach of the agreement, potentially leading to termination. The costs associated with purchasing the computer system range from $15,000 to $25,000.
In terms of assistance, Item 11 indicates that Anago will provide specifications for the computer system, along with the custom NBDS formats, as part of the pre-opening support. However, Anago is not obligated to provide any other ongoing support services related to establishing bookkeeping, accounting, or inventory control procedures. This means that while Anago provides the initial system specifications and software, the subfranchisee is responsible for the costs, maintenance, and proper utilization of the system, and must adhere to Anago's directives regarding its use and any required updates or replacements.