What is the purpose of the Anago Escrow Account?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
The Anago Escrow Account will be utilized solely for Subfranchisor's Client payments and distribution of payments to Subfranchisor, and will not be commingled with any other funds of Franchisor, or of any other of Franchisor's subfranchisors' client payments.
Subfranchisor will set up a separate operating account in its corporate name d/b/a "Anago of [Insert Area]".
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Anago Escrow Account serves as a central hub for managing client payments and ensuring proper distribution of funds between the franchisor, subfranchisor, and unit franchisees. Subfranchisors are required to deposit all client payments into this designated Anago Escrow Account. This account is used exclusively for client payments and the distribution of funds and is not to be commingled with any other funds.
After a subfranchisor deposits a client payment into the Anago Escrow Account, Anago will distribute funds to the subfranchisor weekly for cleared payments, 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. Anago also holds back a portion of the funds to cover amounts the subfranchisor owes to it. The subfranchisor is responsible for paying sales tax from their own operating account and for paying unit franchisees for their services, typically around the 20th of each month following the service month.
During any period of subfranchisor default, Anago has the right to deposit and hold client receipts in the Anago Escrow Account, using these funds to pay unit franchisees directly, less any amounts owed to Anago. The subfranchisor's residual amounts may remain in the escrow account during the default period and can be offset by amounts owed to Anago. This ensures that unit franchisees continue to receive payments for their services even if the subfranchisor is in default. Anago will calculate the subfranchisor's monthly gross revenues based on client payments deposited into the Anago Escrow Account and distribute any remaining amounts to the subfranchisor after deducting fees and a holdback amount to maintain the account balance.
If client payments are unintentionally sent directly to the subfranchisor or a unit franchisee's operating account, these parties must immediately notify Anago and deposit the payment into the Anago Escrow Account for processing. Depositing payments into any account other than the Anago Escrow Account constitutes a default under the agreement, potentially leading to Anago assuming all billing and invoicing responsibilities and directing clients to send payments directly to Anago. This system ensures financial transparency and control, safeguarding the interests of all parties involved in the Anago franchise system.