Is there an exception to the transfer restrictions for an Anago subfranchisor who is an individual?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 10.2 YOUR TRANSFER.
- (a) Personal Rights. The rights and duties stated in this Agreement are personal to You. We have granted the Unit Franchise in reliance on Your business and personal skill, reputation, aptitude and financial capacity. Accordingly, You agree that, unless otherwise expressly permitted by this Agreement, You will not sell, assign, transfer, convey or give voluntarily, involuntarily, directly or indirectly, by operation of law or otherwise (collectively "transfer") any direct or indirect interest in (1) this Agreement, (2) any Account or interest in any Account assigned to You under this Agreement or with respect to which you sign a joinder, or (3) the Unit Franchise without Our prior written consent (that may be granted or withheld by Us in Our sole discretion). However, Our written consent is not required for: (i) a transfer of less than a 5% interest in a publicly held corporation; or (ii) a transfer of all or any part of Your interest to one of Your other original shareholders or partners. A transfer of 25% or more of the voting or ownership interests in Your corporation, partnership or limited liability company, individually or in the aggregate, directly or indirectly, is, for all purposes of this Agreement, considered Your transfer of an interest in this Agreement. Any purported transfer by You, by operation of law or otherwise in violation of this Agreement, is void and is an Event of Default.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the rights and duties within the Subfranchise Agreement are personal to the franchisee. Anago grants the franchise based on the franchisee's business skills, reputation, aptitude, and financial capacity. Therefore, a franchisee cannot transfer any interest in the agreement, accounts, or the franchise without Anago's prior written consent, which Anago may withhold at its discretion.
However, there are two exceptions to this rule. The first exception is for a transfer of less than a 5% interest in a publicly held corporation. The second exception is a transfer of all or any part of the franchisee's interest to one of their other original shareholders or partners.
Additionally, a transfer of 25% or more of the voting or ownership interests in the franchisee's corporation, partnership, or limited liability company, whether individually or in the aggregate, directly or indirectly, is considered a transfer of interest in the agreement. Any transfer that violates the agreement, whether by operation of law or otherwise, is void and constitutes an event of default.