What are the specific procedures for terminating the Anago franchise agreement for cause, considering the franchisee's obligations (Item 9) and the territory rights granted (Item 12)?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
of Your real or personal property used in the Anago Unit Franchise is sold after levy by any sheriff, marshal or constable.
- (b) You will notify Us within 3 days of the occurrence of any of the events described in Subsection 11.2(a).
- (c) If at any time the Subfranchise Rights Agreement is terminated, this Agreement will also terminate; provided, however, that AFI may in its sole discretion, and upon notice to you, assume Our rights and obligations under this Agreement.
SECTION 11.3 TERMINATION BY US - AFTER NOTICE.
If You are in default We may, at Our option, terminate all rights granted to You under this Agreement, without affording You an opportunity to cure the default, effective immediately upon notice to You, upon the occurrence of any of the following Events of Default:
- (a) If You cease to perform contracted service to the Accounts for more than 3 consecutive days without Our consent;
- (b) If You fail or refuse to comply with any mandatory specification, standard or operating procedure We require in this Agreement, in the Manual or otherwise in writing, on the cleanliness or sanitation of the Anago Unit Franchise;
- (c) If You, or Your officer, director, owner or managerial employee is convicted of a felony, a crime of moral turpitude or any other crime or offense that We reasonably believe is likely to have a material adverse effect on the System, the Proprietary Property, the goodwill associated with the Proprietary Property, or Our interest in any of the Proprietary Property, unless You immediately and legally terminate the individual as an officer, director, owner and employee;
- (d) If You deny Us the right to inspect the Anago Unit Franchise or to audit the Records of the Anago Unit Franchise;
- (e) If You engage in conduct that is harmful to or reflects unfavorably on You or the System in that the conduct exhibits a reckless disregard for the physical or mental well-being of employees, Clients, Our representatives or the public at large, including battery, assault, sexual harassment or discrimination, racial harassment or discrimination, alcohol or drug abuse or other forms of threatening, outrageous or unacceptable behavior as determined in Our sole discretion;
- (f) If You, contrary to this Agreement, purport to encumber or transfer any rights or obligations under this Agreement (including transfers of any interest in You), without Our written consent;
- (g) If any breach occurs under Sections 6.2 or 13.1 concerning confidentiality and noncompetition covenants;
- (h) If You knowingly maintain false Records, or knowingly submit any false Records to Us;
- (i) If You misuse or make any unauthorized use of the Proprietary Property or otherwise materially impair the goodwill associated with the Proprietary Property or Our rights in the Proprietary Property;
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago can terminate the franchise agreement for cause under specific circumstances, sometimes without an opportunity for the franchisee to cure the default. These events include ceasing contracted services for more than 3 consecutive days without Anago's consent, failing to comply with cleanliness or sanitation standards, or a conviction of the franchisee (or their officer/director/owner/managerial employee) for a felony or crime that could negatively impact the Anago system. Other causes for immediate termination include denying Anago the right to inspect the franchise, engaging in harmful conduct, unauthorized transfer of rights, breaches of confidentiality or non-competition agreements, maintaining false records, misusing proprietary property, or receiving three or more default notices within 12 months for similar issues, even if cured.
If a franchisee fails to cure a default within the given cure period, Anago can terminate the agreement without further notice. Events of default also include failing to comply with the requirements of the agreement or the manual, or failing to carry out the agreement in good faith. The franchisee bears the burden of proving they properly cured any default, if a cure is permitted. Upon termination, the franchisee must immediately cease operating the Anago Unit Franchise, discontinue using proprietary marks, and stop representing themselves as an Anago franchisee. They must also cease using associated websites and social media accounts, transferring them to Anago upon request.
Regarding franchisee obligations upon termination, the franchisee must comply with restrictions on competition, indemnify Anago for losses, maintain confidentiality, cease operations, pay all outstanding amounts within 10 days, discontinue use of proprietary marks, transfer telephone numbers and websites to Anago, assign all Unit Franchises and Unit Franchise Agreements to Anago, assign all Clients and Client Accounts to Anago, return all Proprietary Property, cease selling Unit Franchises, cease providing services to Unit Franchises, cease solicitation of Clients, and cancel assumed, fictitious and trade name registrations.
Concerning territory rights, Anago grants the franchisee the right to operate within a defined area, but this area is not exclusive. Anago may reduce or redefine the area if the franchisee fails to schedule the minimum required Client Bids. The franchisee is restricted from soliciting Unit Franchisees or clients outside their designated area. Anago retains significant rights, including the right to operate other businesses, sell services through various channels, advertise the system, and enter into contracts with National Accounts, without compensating the franchisee.