What must an Anago Subfranchisor do to maintain territorial protection?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
- (iii) Subfranchisor, within 30 days before the expiration of the Term, signs and delivers to Franchisor, Franchisor's then current form of Anago Subfranchise Rights Agreement, which may contain terms and conditions materially different from this Agreement; provided, however, no renewal fee will be charged. Upon signing and delivery by Franchisor and the expiration of the Initial Term, the Successor Anago Subfranchise Rights Agreement supersedes in all respects this Agreement, and the terms of which may differ from the terms of this Agreement;
- (iv) Subfranchisor has complied with Franchisor's then current qualification and training requirements and all other requirements we impose under a Successor Anago Subfranchise Rights Agreement;
- (v) Subfranchisor understands that any Successor Agreement shall contain a provision for the minimum monthly royalty paid to Franchisor to not be less than the greater of either the minimum required in the last year of this agreement or the average monthly royalty paid during the last year of this agreement; and
- (vi) Subfranchisor must have executed and delivered to Franchisor a general release (in a form prescribed by Franchisor) of all claims against Franchisor and its Affiliates and each of their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, in their corporate and individual capacities, including claims arising under this Agreement and under any applicable laws, rules or regulations.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
Based on the 2025 Anago Franchise Disclosure Document, a Subfranchisor must meet several requirements to be eligible for a Successor Anago Subfranchise Rights Agreement, which effectively maintains their territorial rights. These requirements include submitting an application between 9 and 12 months before the current term ends, not being in default of any agreements with Anago or its affiliates, and satisfying any outstanding debts to Anago. If a default occurs within the last 9 months of the agreement, it must be cured before a successor agreement can be obtained.
Additionally, the Subfranchisor must sign and deliver Anago's current form of Subfranchise Rights Agreement within 30 days before the term's expiration. This new agreement may contain terms and conditions that differ significantly from the original agreement. The Subfranchisor must also comply with Anago's current qualification and training requirements and any other requirements imposed under the Successor Anago Subfranchise Rights Agreement.
Furthermore, the Successor Agreement will include a provision ensuring that the minimum monthly royalty paid to Anago is no less than the greater of either the minimum required in the last year of the existing agreement or the average monthly royalty paid during that last year. Finally, the Subfranchisor must execute and deliver a general release of all claims against Anago and its affiliates, including their officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, in both their corporate and individual capacities. This release covers claims arising under the current agreement and any applicable laws, rules, or regulations.