Is the Royalty Fee for an Anago franchise refundable?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Royalty Fee for a subfranchise is generally non-refundable. Specifically, Section 4.1 states that the Subfranchise Fee of $98,000 is fully earned by Anago upon signing the agreement and is non-refundable. This fee compensates Anago for administrative costs and lost opportunities resulting from granting the subfranchise rights.
However, there are two exceptions where the Subfranchise Fee may be refundable. The first exception is if the subfranchisee is not accepted by Anago at its home office within 30 days from the agreement date. The second exception is as provided in Subsection 2.1(b), although the specific details of Subsection 2.1(b) are not provided in this excerpt.
It is important to note that this excerpt specifically addresses the refundability of the Subfranchise Fee, not the ongoing Royalty Fee, Administrative Support Fee, or Unit Franchisee Fee. The document does not explicitly state whether the Royalty Fee is refundable under any circumstances. A prospective franchisee should clarify the conditions under which any fees paid to Anago might be refundable.