What is the significance of the Subfranchise Rights Agreement date in relation to the Anago franchise agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ST ANY OTHER PARTY BOUND HEREBY.
Section 13.10 - Survival of Provisions
The provisions of this ARTICLE 13 shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement, however effected.
ARTICLE 14 - TERM
Section 14.1 - Term
The Term of this Agreement runs for 10 years from the Agreement Date, unless sooner terminated as provided in this Agreement. The conditions under which Subfranchisor will have the opportunity of obtaining a Successor Anago Subfranchise Rights Agreement at the expiration of this Agreement are stated in Section 14.2.
Section 14.2 - Option to Obtain Successor Anago Subfranchise Rights Agreement
So long as Subfranchisor is not in material default under this Agreement and each Unit Franchise Agreement and all Unit Franchisees are in reasonable compliance with the terms and conditions of their respective Unit Franchise Agreements, Subfranchisor is hereby granted an option to obtain a Successor Anago Subfranchise Rights Agreement for an additional 10-year term, without an additional franchise fee, however both parties agree that any additional costs due to changes in state, federal or local laws associated with the execution of a Successor Anago Subfranchise Rights Agreement shall be borne by Subfranchisor. The following conditions must be met at the time the option is exercised and immediately before the beginning of the Succeeding Term, unless another time is specified, in order to obtain a Successor Anago Subfranchise Rights Agreement:
(i) Subfranchisor gives Franchisor written notice of Subfranchisor's intention to exercise its option to obtain a Successor Anago Subfranchise Rights Agreement by
submitting an application for a Successor Anago Subfranchise Rights Agreement between 9 months and 12 months before the end of the Term;
- (ii) Subfranchisor is not in default of any term of this Agreement, or any other agreement between Subfranchisor and Franchisor or its Affiliates and any outstanding debt owed to Franchisor by Subfranchisor has been satisfied;
- (a) Should the Subfranchisor be in a state of default prior to expiration of the term of this agreement or enter into a state of default during the last 9 months remaining, the default must be cured prior to the renewal or obtaining a Successor Anago Subfranchise Rights Agreement; and
- (b) Should the default not be cured or be determined to be incurable within 60 days of the expiration of the agreement all remedies to cure if any shall be at the sole discretion of the Franchisor before a Successor Anago Subfranchise Rights Agreement may be obtained;
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the 'Agreement Date' is defined as the date the President of Anago executes the Anago Subfranchise Rights Agreement. This date is significant because it marks the commencement of the 10-year term of the agreement, as detailed in Section 14.1.
The Agreement Date is the starting point for calculating important deadlines and obligations within the franchise relationship. For instance, the subfranchisor has the option to obtain a Successor Anago Subfranchise Rights Agreement for an additional 10-year term, provided they meet certain conditions and apply between 9 and 12 months before the end of the initial term, which is calculated from the Agreement Date.
Moreover, the license granted to the subfranchisor for any software and related materials is effective for the term of the Subfranchise Rights Agreement, contingent upon the agreement remaining in full force. Should the agreement terminate, the subfranchisor must cease operations and disassociate from Anago, underscoring the importance of the Agreement Date in determining the duration of these rights and responsibilities.