What is the purpose of the holdback amount deducted by Anago during the monthly reconciliation?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
By or about the 26 th of each month, Franchisor will distribute to Subfranchisor any amounts not previously distributed to Subfranchisor as part of the weekly distributions based on Gross Revenues received during the previous month, less any Royalty Fees, Fund contributions and any other payments owed to Franchisor which accrued during the previous calendar month, and less a holdback amount to satisfy the minimum account balance required to maintain the Anago Escrow Account.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the holdback amount deducted during the monthly reconciliation is used to maintain the minimum account balance required for the Anago Escrow Account. This reconciliation process occurs around the 25th of each month, where Anago calculates the Subfranchisor's monthly Gross Revenues based on client payments deposited into the Anago Escrow Account during the previous month.
Around the 26th of each month, Anago distributes to the Subfranchisor any remaining amounts from the weekly distributions, based on Gross Revenues received during the previous month. From this distribution, Anago deducts Royalty Fees, Fund contributions, and any other payments owed to Anago that accrued during the previous calendar month. The holdback ensures that the Anago Escrow Account maintains the necessary minimum balance.
For a prospective Anago subfranchisee, this means that the amount they receive each month will be net of these deductions, including the holdback for the escrow account. Understanding these deductions is crucial for managing cash flow and financial planning. The subfranchisee should ensure they understand how the minimum balance for the Anago Escrow Account is determined and how the holdback amount is calculated to avoid any surprises in their monthly distributions.