What rights does Anago expressly reserve for itself and its affiliates regarding other businesses?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
approve the individual providing the training. Franchisor will reimburse Subfranchisor for reasonable lunch or dinner expenses related to the training of other Anago subfranchisors.
Section 3.11 - Use of Designated Suppliers.
Franchisor reserves the right to identify, approve or designate, from time to time, (a) manufacturers, vendors, distributors, suppliers, and producers for the Anago System (each a "Vendor"), (b) the terms under which Vendors provide products or services (including insurance, cleaning products and supplies, equipment, and materials) to the Subfranchised Business and Franchised Businesses, and (c) the distribution methods for any goods or services provided to or used by the Subfranchised Business and any Franchised Businesses. For any product or service for which Franchisor has approved or designated a Vendor, Subfranchisor must purchase and require its Unit Franchisees to purchase all such goods and services only from the approved or designated Vendor for that product or service, under terms, in the manner, and from the source designated by Franchisor. In Franchisor's discretion, there may be only one approved or designated Vendor for any particular product or service, and the Vendor may be Franchisor or its Affiliates (in which case, Franchisor and its Affiliates may derive revenue from purchases and use any such revenue in its sole and unfettered discretion). Franchisor may, at its option, arrange with Vendors to collect or have its Affiliates collect costs and expenses associated with products and services they provide to Subfranchisor and, in turn, pay the Vendor, on Subfranchisor's behalf, for such products or services. If it chooses to do so, Subfranchisor agrees that Franchisor or its designated Affiliates may auto debit Subfranchisor's escrow account for such amounts in the same manner and using
the same authorization that Subfranchisor grants Franchisor with respect to payment of Royalty and other fees.
ARTICLE 4 - SUBFRANCHISE FEE AND COMPENSATION
Section 4.1 - Subfranchise Fee
Subfranchisor will pay to Franchisor a Subfranchise Fee in the amount of $98,000. The Subfranchise Fee is fully earned by Franchisor and is non-refundable upon signing this Agreement in consideration for the administrative and other costs incurred by Franchisor and opportunities lost or deferred as a result of the rights granted to Subfranchisor in this Agreement, 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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago retains specific rights regarding the operation of other businesses, particularly concerning vendors and national accounts. Anago reserves the right to identify, approve, or designate vendors for the Anago system, dictating the terms under which these vendors provide products or services to Anago franchisees. This includes specifying the distribution methods for goods and services used by the franchisees.
Anago can designate a single approved vendor for any product or service, and this vendor may be Anago itself or its affiliates. This arrangement allows Anago and its affiliates to derive revenue from franchisee purchases, which they can use at their discretion. Anago also has the option to arrange for vendors or its affiliates to collect costs and expenses from the subfranchisor for products and services provided to the subfranchisor, paying the vendor on the subfranchisor's behalf, debiting the subfranchisor's account for such payments.
Anago also maintains control over National Accounts, reserving the right to contract directly for Anago services with these accounts, regardless of where the account originates. A "National Account" is defined as a client with multiple locations (ten or more in the franchisee's area, or multiple locations inside and outside the area) or one that requests Anago or its affiliates to respond to a proposal where the franchisee doesn't meet the qualifications. If Anago secures a contract with a National Account in the subfranchisor's area, Anago may offer the subfranchisor the option to have its unit franchisees perform services for those locations, under terms and conditions specified by Anago and on a non-exclusive basis. With the exception of National Accounts, the subfranchisor must use Anago's approved client contract form. Anago retains all rights to clients and client accounts upon termination or expiration of the franchise agreement.