Can the Proprietary Property be used as security for any obligation or indebtedness related to the Anago Unit Franchise?

According to Anago's 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from using the Proprietary Property as security for any obligation or indebtedness. This restriction is outlined within the section detailing the franchisee's use of Anago's Proprietary Property. The Proprietary Property encompasses Anago's service marks, logos, trademarks, trade names, and copyrighted information that the franchisee is authorized to use under the Franchise Agreement.

This stipulation means that franchisees cannot leverage Anago's brand assets or intellectual property to secure loans or other financial obligations. This is a protective measure by Anago to maintain control over its brand and prevent its dilution or misuse. It ensures that the brand's reputation and goodwill are not put at risk due to the financial dealings of individual franchisees.

Such a restriction is common in franchising, as franchisors typically want to safeguard their brand identity and standards. By preventing franchisees from using the Proprietary Property as collateral, Anago retains greater control over its brand and reduces the risk of its assets being encumbered by franchisee debt. This provision is a standard element of the franchise agreement designed to protect the integrity and value of the Anago brand.