Is an Anago Subfranchisor allowed to use the Proprietary Marks as security for any obligation or indebtedness?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor acknowledges the importance of protecting the Proprietary Marks and ensuring that all Proprietary Marks are used in strict accordance with the terms and conditions of this Agreement. Subfranchisor further agrees that:
- (a) Subfranchisor may sublicense the Proprietary Marks to the Unit Franchisees only in accordance with the terms of the Unit Franchise Agreement approved by Franchisor. Subfranchisor shall use its best efforts to ensure that all Unit Franchisees in the Area strictly comply with all terms, conditions, standards and specifications relating to the Proprietary Marks at all times during the Term of this Agreement;
- (b) Subfranchisor will use only the Proprietary Marks as designated by Franchisor and will use them only in the manner required or authorized and permitted by Franchisor;
- (c) Subfranchisor's right to use the Proprietary Marks is limited to the uses expressly authorized under this Agreement, and any unauthorized use of the Proprietary Marks is an infringement of Franchisor's rights;
- (d) Subfranchisor will not use the Proprietary Marks as security for any obligation or indebtedness;
- (e) Subfranchisor will not use the Proprietary Marks as part of his or her corporate, partnership, limited liability company or other business name which must consist of 4 letters or numbers (for example, "TROM Corp." or "1234, Inc." (but may use the Anago trade name as a fictitious, trade or assumed name that is properly registered, if required by law (for example, "TROM Corp. d/b/a Anago of Tampa"). Subfranchisor shall not authorize any Unit Franchisee in the Area to use the Proprietary Marks as part of any name of any corporation, partnership, limited liability company or other business entity;
- (f) Subfranchisor shall not register or use any domain name or URL that contains, uses or displays the words "Anago Cleaning Systems" or any portion thereof, or the initials "ACS,"
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to the 2025 Anago Franchise Disclosure Document, a Subfranchisor is not allowed to use the Proprietary Marks as security for any obligation or indebtedness. Anago's Proprietary Marks include the trade name and logo "Anago" and all other trademarks, service marks, trade names, logos and commercial symbols presently owned or licensed by Franchisor or its Affiliates or later acquired or adopted by Franchisor or its Affiliates as part of the System. The system is a comprehensive marketing and operational system prescribed by Anago to be used in the conduct of the Subfranchise Business and Unit Franchise Businesses.
This restriction protects Anago's brand and reputation. By preventing subfranchisors from using the trademarks as collateral, Anago ensures that the brand's value is not put at risk due to a subfranchisor's financial difficulties. This is a standard practice in franchising, as franchisors need to maintain control over their brand identity and standards.
The subfranchisor's rights to use the Proprietary Marks are limited to those uses expressly authorized in the agreement. Any unauthorized use of the Proprietary Marks is considered an infringement of Anago's rights. This includes registering or using any domain name or URL that contains, uses, or displays the words "Anago Cleaning Systems" or any portion thereof, or the initials "ACS."
Overall, these stipulations are designed to protect the Anago brand and ensure consistent quality and representation across all franchise locations. Prospective subfranchisors should understand these restrictions and adhere to them to maintain their franchise agreement and contribute to the overall success of the Anago system.