factual

What is the Anago subfranchisor required to do with Client Accounts upon termination of the subfranchise agreement?

Anago Franchise · 2025 FDD

Answer from 2025 FDD Document

  • (f) Upon termination or expiration (through default or otherwise) of this Agreement, Subfranchisor shall deliver all Client lists and Client Accounts to Franchisor, including any and all documentation relating thereto and Subfranchisor shall have no further rights therein.

Section 9.4 - Cessation of Operation

  • (a) Subfranchisor will immediately cease operation of the Subfranchise Business and shall not directly or indirectly, at any time or in any manner identify itself or any business as a current or former Anago Subfranchise, franchisee, licensee or dealer of, or otherwise associated with, Franchisor or the System. Without limiting the generality of the foregoing, Subfranchisor shall immediately: (i) cease selling Unit Franchises for the Franchisor; (ii) cease using all advertising materials, forms and other materials bearing the Proprietary Marks; (iii) cease holding itself out as a Subfranchisor of Franchisor; (iv) take all steps necessary to disassociate itself from Franchisor and the System; (v) cease solicitations of Clients; (vi) cease all communication with all Clients; (vii) cease providing services to Unit Franchisees; and (viii) promptly and at its own expense make the alterations Franchisor may specify in the Anago Manuals (or otherwise) to distinguish the Premises clearly from its former appearance in order to prevent public confusion. Franchisor is free to sell new Unit Franchises, enter into new Subfranchise rights agreements or other arrangements in the Area without any obligation to the Subfranchisor. Subfranchisor shall immediately assign all Client Accounts to Franchisor in accordance with Section 9.5 below.
  • (c) Subfranchisor shall immediately discontinue all use of all Confidential Information, including all Manuals and Client Information.

Section 9.2 - Discontinue Use of Proprietary Marks and Confidential Information

  • (a) Subfranchisor will take all action as may be necessary to cancel any fictitious, trade or assumed name registration, or equivalent registration that contains the name "Anago" or any other Proprietary Mark or colorable imitation of any trademark, trade name or service mark of Franchisor or its Affiliates. Subfranchisor will furnish Franchisor with evidence of compliance with this obligation to cancel the registration within 30 days after termination or expiration of this Agreement. If Subfranchisor fails to do so, Subfranchisor appoints Franchisor as Subfranchisor's attorney-in-fact to do so for Subfranchisor.
  • (b) Subfranchisor acknowledges that there will be substantial confusion in the mind of the public if, after the end or termination of this Agreement, Subfranchisor continues to use the telephone number, websites, social media accounts, and other printed and electronic identifiers associated with the Subfranchise Business or with which the Subfranchise Business has been identified. Therefore, Subfranchisor agrees that promptly after the expiration or termination of this Agreement for any reason, Subfranchisor will cease and desist from using all such identifiers. On Franchisor's request, Subfranchisor will direct all persons responsible for or controlling such identifiers to transfer them to Franchisor or its designee. As regards the telephone number associated with the Subfranchise Business, Subfranchisor will direct the telephone company servicing Subfranchisor to transfer the telephone number to Franchisor, or to any person and at any location as the Franchisor directs. If Subfranchisor does not promptly direct the telephone company, Subfranchisor irrevocably appoints Franchisor as his or her attorney-in-fact to direct the telephone company to make the transfer. There will be no refund of any prepayments by Subfranchisor to the telephone company. Subfranchisor shall execute the Conditional Assignment of Telephone Numbers Agreement in the form attached hereto as Exhibit VI.

Source: Item 23 — RECEIPTS (FDD pages 62–298)

What This Means (2025 FDD)

According to Anago's 2025 Franchise Disclosure Document, upon termination or expiration of the Subfranchise Agreement, the subfranchisor is required to deliver all client lists and client accounts to Anago, including all related documentation. The subfranchisor will have no further rights to these client accounts.

Anago also states that the subfranchisor must immediately cease operation of the subfranchise business and not identify itself as a current or former Anago subfranchise. The subfranchisor must also cease solicitations of clients and all communication with them. The subfranchisor is required to assign all Client Accounts to Anago.

Furthermore, the subfranchisor is obligated to discontinue all use of confidential information, including manuals and client information. The subfranchisor must also take action to cancel any registrations containing the name "Anago" and transfer all telephone numbers and identifiers associated with the subfranchise business to Anago.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.