Who is required to personally guarantee the obligations and performance under the Anago Subfranchise Rights Agreement?

According to Anago's 2025 Franchise Disclosure Document, if the Subfranchise Rights Business is structured as a limited liability company or a corporation, the individual shareholders or members are required to personally guarantee the obligations and performance under the Subfranchise Rights Agreement, as well as any other agreement with Anago. This means that the personal assets of these individuals could be at risk if the subfranchise fails to meet its financial or contractual obligations to Anago.

This requirement is fairly common in franchising, as it provides the franchisor with an additional layer of security. By requiring a personal guarantee, Anago ensures that the individuals behind the business are fully committed to its success and are willing to be held personally accountable. This can also help to ensure that the subfranchisee operates the business responsibly and in accordance with the terms of the franchise agreement.

Furthermore, Anago requires that an individual who is the controlling shareholder or managing member of the entity must act as the Designated Manager. This Designated Manager must complete Anago's initial training program and be responsible for supervising activities under the Subfranchise Rights Agreement. This obligation cannot be delegated without prior approval from Anago. This ensures that someone with proper training and a vested interest is actively managing the subfranchise business.

Prospective Anago subfranchisees should carefully consider the implications of providing a personal guarantee and consult with legal and financial advisors to fully understand the risks involved. They should also ensure they understand the terms and conditions of the Subfranchise Rights Agreement and any other agreements with Anago before signing.