Does Anago provide guidance on royalty payments?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
reement, except if Subfranchisor is not accepted by Franchisor at its home office within 30 days from the Agreement Date or except as provided in Subsection 2.1(b).
Section 4.2 - Ongoing Payments to Franchisor
- (a) Royalty Fee. During the Term, Subfranchisor will pay to Franchisor a monthly royalty fee ("Royalty Fee") by the 20th day of each month equal to 5% of the previous calendar month's Gross Revenues. Subfranchisor acknowledges and agrees that its payment of Royalty Fees to Franchisor is subject to a monthly minimum equal to the greater of: (i) 5% of the previous month's Gross Revenues generated by Subfranchisor and the Unit Franchisees under the Unit Franchise Agreements; or (ii) $1,500 per month starting in the 13th month of operation, and each year thereafter the minimum monthly royalty shall increase at the rate of an additional $1,500 each year.
- (b) Administrative Support Fee. During the Term, Subfranchisor will pay to Franchisor a monthly fee of 2% of the previous calendar month's Gross Revenues collected.
- (c) Unit Franchisee Fee. During the Term, Subfranchisor will pay to Franchisor a flat fee sum of $400.00 for each Anago Unit Franchise sold by or on behalf of the Subfranchisor.
- (d) Fund Contributions. If a Fund is established pursuant to Section 2.5(b) of this Agreement, Subfranchisor shall contribute, on a monthly basis, an amount not to exceed 2.2% of Subfranchisor's monthly Gross Revenues during the preceding month, as designated by Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the brand offers specific guidance on royalty payments for subfranchisors. Anago requires subfranchisors to pay a monthly royalty fee, which is due by the 20th day of each month. This royalty is calculated as 5% of the previous calendar month's Gross Revenues.
Anago also stipulates a minimum monthly royalty payment. Starting from the 13th month of operation, the subfranchisor must pay at least the greater of 5% of the previous month's Gross Revenues or $1,500. This minimum monthly royalty increases by an additional $1,500 each year.
Furthermore, Anago outlines the methods and procedures for these payments, noting that these are subject to change with written notice to the subfranchisor. Anago has the right to require subfranchisors to make all fee payments via electronic funds transfer (EFT) directly to Anago. The subfranchisor is responsible for completing and submitting any necessary forms to facilitate these payment changes.