Does Anago require the Subfranchisor's consent or approval to transfer or assign the Subfranchise Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 10.2 YOUR TRANSFER.
(a) Personal Rights. The rights and duties stated in this Agreement are personal to You. We have granted the Unit Franchise in reliance on Your business and personal skill, reputation, aptitude and financial capacity. Accordingly, You agree that, unless otherwise expressly permitted by this Agreement, You will not sell, assign, transfer, convey or give voluntarily, involuntarily, directly or indirectly, by operation of law or otherwise (collectively "transfer") any direct or indirect interest in (1) this Agreement, (2) any Account or interest in any Account assigned to You under this Agreement or with respect to which you sign a joinder, or (3) the Unit Franchise without Our prior written consent (that may be granted or withheld by Us in Our sole discretion). However, Our written consent is not required for: (i) a transfer of less than a 5% interest in a publicly held corporation; or (ii) a transfer of all or any part of Your interest to one of Your other original shareholders or partners. A transfer of 25% or more of the voting or ownership interests in Your corporation, partnership or limited liability company, individually or in the aggregate, directly or indirectly, is, for all purposes of this Agreement, considered Your transfer of an interest in this Agreement. Any purported transfer by You, by operation of law or otherwise in violation of this Agreement, is void and is an Event of Default.
(b) Transfer to Your Corporation. This Agreement may be assigned to a corporation where You own all of the issued and outstanding capital stock if:
- (i) You actively manage the corporation and continue to devote Your best efforts to the full exploitation of the Anago Unit Franchise and to the day-to-day operation and development of the Anago Unit Franchise;
- (ii) The corporation is newly organized;
- (iv) The corporation cannot use the name "Anago" in any derivative or form in the corporate name;
- (iv) An authorized officer of the corporation signs a document in a form We approve, agreeing to become a party bound by all the provisions of this Agreement;
- (i) You actively manage the corporation and continue to devote Your best efforts to the full exploitation of the Anago Unit Franchise and to the day-to-day operation and development of the Anago Unit Franchise;
(v) We approve a personal guaranty and agreement not to sell, assign, pledge, mortgage or otherwise transfer or encumber the stock of the corporation;
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the rights and duties within the Subfranchise Agreement are personal to the Subfranchisor. Anago grants the Unit Franchise based on the Subfranchisor's business and personal skills, reputation, aptitude, and financial capacity. Therefore, the Subfranchisor generally cannot transfer any interest in the Agreement, any Account, or the Unit Franchise without Anago's prior written consent, which Anago may grant or withhold at its sole discretion. Any transfer without this consent is considered void and an event of default.
There are two exceptions where Anago's written consent is not required. The first is a transfer of less than a 5% interest in a publicly held corporation. The second is a transfer of all or any part of the Subfranchisor's interest to one of their other original shareholders or partners. However, a transfer of 25% or more of the voting or ownership interests in the Subfranchisor's corporation, partnership, or limited liability company, whether individually or in the aggregate, is considered a transfer of an interest in the Agreement and thus requires Anago's consent.
The Subfranchise Agreement may be assigned to a corporation where the Subfranchisor owns all the issued and outstanding capital stock, provided certain conditions are met. These conditions include the Subfranchisor actively managing the corporation, the corporation being newly organized, the corporation not using the name "Anago" in its corporate name, an authorized officer of the corporation agreeing to be bound by the Agreement, and Anago approving a personal guaranty and agreement not to transfer the stock of the corporation.
These stipulations ensure that Anago maintains control over who operates an Anago franchise and protects the brand's reputation by ensuring that only qualified and approved individuals or entities are involved. Prospective subfranchisees should carefully consider these restrictions on transferability, as they could impact their ability to exit the business or bring in new partners.