How are payments from clients handled for Anago accounts assigned to a franchisee?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Section 2.4 - Billing and Collection System
(a) Invoicing. Under the Unit Franchise Agreements, each Unit Franchisee appoints Subfranchisor as its agent for purposes, throughout the term of the Unit Franchise Agreement, of billing and collecting for services the Unit Franchisee provides to its Clients. Subfranchisor hereby delegates to Franchisor the performance of those services, utilizing the NBDS System or such other program as designated by Franchisor as described in this Section 2.4. Franchisor will send monthly
invoices to every Client account serviced by Subfranchisor's Unit Franchisees for up to twelve (12) months following commencement of the Subfranchisor's operations and, at Franchisor's option, indefinitely in Franchisor's sole discretion or upon a default under this Agreement which remains uncured beyond all applicable notice and cure periods (an "Event of Default"). Should: (a) Subfranchisor not assume the invoicing after the first twelve (12) months following commencement of operations; or (b) Franchisor elect to assume invoicing upon an Event of Default, Franchisor may charge Subfranchisor the fees set forth below in Section 2.4(h).
- (b) Deposit of Client Receipts. Unless otherwise directed by Franchisor, Subfranchisor will collect and deposit all Client payments into an escrow account designated by Franchisor, at an acceptable banking facility designated or approved in writing by Franchisor (the "Anago Escrow Account"), until the time for distribution to Subfranchisor and later distribution to its Unit Franchisees.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago unit franchisees appoint the subfranchisor as their agent for billing and collections from clients. The subfranchisor then delegates these tasks to Anago. Anago invoices clients monthly for services and supplies provided by the franchisee. All client payments should be made payable to the Anago Escrow Account and deposited into this account daily by the subfranchisor.
If a client makes a payment directly to the franchisee, the franchisee must notify Anago and deposit the payment into the Anago Escrow Account; they cannot deposit it into their own account. Failure to forward payments received directly to the Anago office results in a $100 handling fee per payment. Anago distributes client receipts weekly to the subfranchisor, after deducting royalties, administrative support fees, insurance fees, accounting fees, service fees, advertising fees, late fees, temporary management fees, interest, and any other payments owed to Anago or its affiliates. The subfranchisor then pays the unit franchisee for services rendered, typically around the 20th of each month, providing a detailed statement of the previous month's accounting activity.
Anago will mail the monies collected, as recorded in the "Due Owner" column of the Owners Report (monthly statement), to the franchisee on or before the 20th day but no later than the 25th day of each month following the month in which services were rendered, less monies due to Anago. If amounts billed to the Accounts Anago assigns to the franchisee are unpaid, the franchisee will incur the loss of nonpayment except in instances where Anago has guaranteed in writing payments to the franchisee. Anago will take action to enforce payment at the franchisee's discretion and expense. Anago can also initiate action on its own to recover unpaid amounts of its fees.
This system ensures that Anago maintains control over billing and collections, allowing for consistent record-keeping and deduction of fees. It also places the responsibility on the franchisee to forward any client payments they receive directly to Anago, with penalties for non-compliance. The franchisee bears the risk of non-payment from clients unless Anago provides a written guarantee. Prospective franchisees should understand this payment process and the associated fees and responsibilities.