Is unauthorized assignment or transfer a curable default under the Anago Subfranchise Rights Agreement?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
n notice from us of the default. | | 5. Appointment of a receiver or custodian; | | |---|---| | 6. Filing for composition with creditors; | | | 7. Judgment of $5,000 | or more remains | | h. "Cause" defined – non-curable defaults | Sections 8.1 and 8.2 | The following defaults may not be cured: 1. Insolvency or general assignment for creditors; 2. Filing in bankruptcy that is not dismissed within 45 days; 3. Adjudication of bankruptcy; 4. Filing for appointment of a receiver or custodian; 5. Appointment of a receiver or custodian; 6. Filing for composition with creditors; 7. Judgment of $5,000 or more remains unsatisfied for 30 days or longer; 8. Execution of levy; 9. Filing of foreclosure suit that is not dismissed within 45 days; 10. Sale of a substantial portion of your assets after levy; 11. Failure to complete training; 12. Knowing or willful violations of laws, rules or regulations, the commission of an illegal act in connection with the sale of a franchise, act of dishonesty, etc.; 13. You or any of your officers, directors, or owners or employees is charged with, pleads guilty or no contest to, or is convicted of a felony, crime or moral turpitude or any other offense that might have a materially adverse affect on the System or the Proprietary Marks; 14. You deny us our right of inspection or audit; 15. Material breach of any obligation to your Unit Franchisees in the Area; 16. You commit any acts involving dishonesty, bad faith, misfeasance, malfeasance, or willful misconduct; 18. Unauthorized assignment or transfer; 19. Breach of confidentiality or non competition provisions of your Subfranchise Rights Agreement; 20. You knowingly maintain false books or records; 21. Repeated complaints from Unit Franchisees in your Area; 22. Failure to achieve Minimum Annual Performance Requirements; 23. Failure to comply with in-term restrictive covenants; | |----------------------------------------------------|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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, an unauthorized assignment or transfer of the Subfranchise Rights Agreement is not a curable default. The FDD specifies that certain defaults can be cured within 30 days of written notice from Anago, but it also lists defaults that cannot be cured.
Specifically, Section 8.1 and 8.2 of the Anago Subfranchise Rights Agreement outline defaults that cannot be cured, and unauthorized assignment or transfer is included in this list. This means that if a franchisee transfers or assigns their rights without authorization, Anago has grounds to terminate the agreement immediately without providing an opportunity to correct the breach.
This provision is important for prospective Anago franchisees to understand, as it highlights the significance of adhering to the transfer and assignment protocols outlined in the agreement. Failure to obtain proper authorization before transferring any interest in the franchise could result in immediate termination of the agreement. Franchisees should carefully review Section 7.2, which defines 'transfer,' and Section 7.3, which outlines the conditions for franchisor approval of a transfer, to ensure compliance and avoid potential default.