Does Anago owe a fiduciary obligation to franchisees for administering the Advertising Fund?

According to Anago's 2025 Franchise Disclosure Document, Anago does not owe a fiduciary obligation to its Subfranchisors or Unit Franchisees regarding the administration of the advertising fund. The FDD states this explicitly, clarifying that Anago is not bound by fiduciary duty in this context. This means that Anago has considerable discretion in how the advertising fund is managed and spent.

Specifically, Anago has sole discretion over the content, media, and targeting of advertising activities. The advertising fund is intended to maximize general public recognition of the Anago trademarks and system for the benefit of all franchisees. Anago is not obligated to ensure that expenditures are equivalent or proportionate to a franchisee's contribution, nor is it required to guarantee that a franchisee benefits directly or on a pro-rata basis from advertising or marketing efforts.

Subfranchisors may be required to contribute up to 2.2% of their gross revenues to the advertising fund. These contributions are used for various advertising, marketing, and public relations activities aimed at enhancing the Anago franchise system's public reputation. While Anago will provide an annual statement of operations for the fund prepared by an independent accountant upon request, the absence of a fiduciary duty gives Anago significant latitude in making decisions about the fund's use.

This arrangement is fairly common in franchising, where franchisors often retain control over advertising funds to ensure consistent branding and marketing strategies across the entire system. However, it's crucial for prospective franchisees to understand that they may not have direct control over how their advertising contributions are spent and that Anago is not legally obligated to act in their individual best interests regarding the fund's administration.