What sections of the Anago Subfranchise Rights Agreement define non-curable defaults?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
n notice from us of the default. | | 5. Appointment of a receiver or custodian; | | |---|---| | 6. Filing for composition with creditors; | | | 7. Judgment of $5,000 | or more remains | | h. "Cause" defined – non-curable defaults | Sections 8.1 and 8.2 | The following defaults may not be cured: 1. Insolvency or general assignment for creditors; 2. Filing in bankruptcy that is not dismissed within 45 days; 3. Adjudication of bankruptcy; 4. Filing for appointment of a receiver or custodian; 5. Appointment of a receiver or custodian; 6. Filing for composition with creditors; 7. Judgment of $5,000 or more remains unsatisfied for 30 days or longer; 8. Execution of levy; 9. Filing of foreclosure suit that is not dismissed within 45 days; 10. Sale of a substantial portion of your assets after levy; 11. Failure to complete training; 12. Knowing or willful violations of laws, rules or regulations, the commission of an illegal act in connection with the sale of a franchise, act of dishonesty, etc.; 13. You or any of your officers, directors, or owners or employees is charged with, pleads guilty or no contest to, or is convicted of a felony, crime or moral turpitude or any other offense that might have a materially adverse affect on the System or the Proprietary Marks; 14. You deny us our right of inspection or audit; 15. Material breach of any obligation to your Unit Franchisees in the Area; 16. You commit any acts involving dishonesty, bad faith, misfeasance, malfeasance, or willful misconduct; 18. Unauthorized assignment or transfer; 19. Breach of confidentiality or non competition provisions of your Subfranchise Rights Agreement; 20. You knowingly maintain false books or reco
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–52)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Sections 8.1 and 8.2 of the Subfranchise Rights Agreement define defaults that cannot be cured. These non-curable defaults provide grounds for Anago to terminate the agreement without allowing the subfranchisee an opportunity to correct the issue.
Specifically, these non-curable defaults include scenarios indicating financial instability or illegal/unethical conduct. Examples of financial instability are insolvency, assignment for creditors, bankruptcy filings not dismissed within 45 days, adjudication of bankruptcy, appointment of a receiver or custodian, filing for composition with creditors, unsatisfied judgments of $5,000 or more for 30 days or longer, execution of levy, filing of foreclosure suits not dismissed within 45 days, and sale of a substantial portion of assets after levy.
Other non-curable defaults relate to misconduct or failure to meet essential obligations. These include failure to complete training, knowing or willful violations of laws or regulations, commission of illegal acts related to franchise sales, acts of dishonesty, conviction of a felony or crime of moral turpitude, denial of inspection or audit rights to Anago, material breach of obligations to unit franchisees, acts involving dishonesty or bad faith, unauthorized assignment or transfer of the agreement, breach of confidentiality or non-competition provisions, maintaining false books or records, repeated complaints from unit franchisees, failure to achieve minimum annual performance requirements, and failure to comply with in-term restrictive covenants.
Prospective Anago subfranchisees should carefully review Sections 8.1 and 8.2 of the Subfranchise Rights Agreement to fully understand the circumstances that could lead to immediate termination of their agreement without an opportunity to cure the default. Understanding these provisions is crucial for managing risk and ensuring compliance with the terms of the franchise agreement.