What is the transfer fee required to be paid to Anago in lieu of an initial fee when transferring a subfranchise?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
| k. "Transfer" by franchisee - defined | Section 7.2 | Transfer means any sale, assignment, transfer, conveyance or gift, whether voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise, of any direct or indirect interest in your Subfranchise Rights Agreement or in your Anago Subfranchise Rights Business. A transfer to any other original owner of your Anago Subfranchise Rights Business is not considered a transfer; provided that the transferee shall remain bound by the personal guaranty. |
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| l. Franchisor approval of transfer by franchisee | Section 7.2 | We have the right to approve or disapprove of any transfers, except that consent is not required for the following transfers; (i) transfer by an individual to an entity wholly owned by such individual, which entity shall conduct no business other than the Subfranchise Business; (ii) a transfer of less than a 5% interest in a publicly-held corporation; (iii) if a Subfranchisor is an entity, a transfer of any interest in the Subfranchisor from an existing owner to another existing owner; (iv) transfers of less than a controlling interest, in the aggregate, in you; and (v) transfers which are made for family and estate planning purposes (1) to your spouse, (2) to your adult child(ren) or (3) into a trust agreement for the benefit of you, your spouse, or your children. |
| m. Conditions for franchisor approval of transfer | Section 7.3 | 1. You are not in default (monetary or non monetary) under any agreement you have with us; 2. You and your owners must sign a general release of all claims against us; 3. You must subordinate any purchase money financing; 4. The transferee must either assume your obligations under the Subfranchise Rights Agreement or, at our election, sign our then current form of Subfranchise Rights Agreement and other ancillary agreements; 5. The transferee must pay a transfer fee of $10,000 in lieu of paying an initial fee; 6. We must interview and approve the transferee; the transferee must meet our educational, managerial and business standards and meet such other
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 44–52)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, a subfranchisee must pay a transfer fee of $10,000 to Anago in lieu of paying an initial fee when transferring their subfranchise rights. This fee is one of several conditions that must be met for Anago to approve the transfer.
Other conditions include ensuring that the subfranchisee is not in default of any agreements with Anago, that both the subfranchisee and their owners sign a general release of all claims against Anago, and that any purchase money financing is subordinated. Additionally, the transferee must either assume the existing obligations under the Subfranchise Rights Agreement or sign Anago's then-current form of the agreement and other related documents.
Anago also requires that the transferee be interviewed and approved, meeting the company's educational, managerial, and business standards, as well as any other criteria Anago may be requiring at the time of the transfer. The subfranchisee must also demonstrate that all hard copy documents and electronic data, including client contracts and Unit Franchise Agreements, are current.
These conditions are typical in franchising to ensure that any new subfranchisee meets Anago's standards and that the transfer process is smooth and legally sound, protecting the Anago brand and the interests of other franchisees.