What is the Anago subfranchisor's responsibility regarding the delivery of the FDD to prospective franchisees?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Subfranchisor shall be responsible for delivering to each prospective franchisee in the Area a complete copy of Subfranchisor's then-current FDD that has been approved by Franchisor.
Subfranchisor shall not make any representations or statements to prospects for franchises which are (i) in addition to, inconsistent with or contradictory to the contents of the FDD; or (ii) misleading, incomplete, fraudulent or untrue.
SUBFRANCHISOR SHALL NOT, UNDER ANY CIRCUMSTANCES, MAKE ANY FINANCIAL PERFORMANCE REPRESENTATIONS (AS DEFINED BY THE FTC Franchise Rule) TO ANY PROSPECTIVE FRANCHISEE, EXCEPT AS EXPRESSLY STATED IN ITEM 19 OF THE FDD (Subfranchisor – Single Unit).
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the subfranchisor is responsible for providing a copy of the then-current FDD, which has been approved by Anago, to each prospective franchisee in the designated area. The subfranchisor must ensure compliance with all applicable franchise regulations. To this end, the subfranchisor needs to retain a qualified franchise attorney to assist with their legal obligations under these franchise regulations.
Furthermore, the Anago subfranchisor is prohibited from making representations or statements to potential franchisees that are additional to, inconsistent with, or contradictory to the contents of the FDD. They also cannot make statements that are misleading, incomplete, fraudulent, or untrue. This is to ensure that prospective franchisees receive accurate and consistent information about the franchise opportunity.
Most importantly, the subfranchisor is explicitly prohibited from making any financial performance representations to prospective franchisees unless those representations are expressly stated in Item 19 of the FDD. This restriction is in line with the FTC Franchise Rule, which aims to prevent misleading earnings claims and protect potential franchisees from unrealistic expectations.