Under what circumstances can the Anago Franchisor immediately terminate the Subfranchisor's rights?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
aults and whether the defaults were cured by Subfranchisor.
- (n) If Subfranchisor fails to use the proprietary software or systems as directed by the Franchisor.
Section 8.3 - Termination by Franchisor - After Notice and Right to Cure
Except as otherwise provided in Sections 8.1 and 8.2, Subfranchisor has 30 days after delivery from Franchisor of a written Notice of Default specifying the nature of the default within which to remedy any default under this Agreement and provide evidence of cure satisfactory to Franchisor. If any default is not cured within that time, or any longer period as applicable law may require, all the rights of Subfranchisor under this Agreement terminate without additional notice to Subfranchisor effective immediately upon the expiration of the 30-day period or any longer period as applicable law may require. In addition to the events specified in Sections 8.1 and 8.2, Subfranchisor is in default under this Section for any failure to comply with any of the requirements imposed by this Agreement, as it may reasonably be revised or supplemented by the Anago Manuals, or to carry out the terms of this Agreement in good faith. Subfranchisor has the burden of proving Subfranchisor properly and timely cured any default, to the extent a cure is permitted under this Agreement.
Section 8.4 - Cross Default
If Subfranchisor commits a default in the performance of any of the covenants, conditions or agreements contained in any other agreement between Subfranchisor and Franchisor or its Affiliates, Subfranchisor shall also have breached this Agreement and Franchisor shall have all of the remedies available to it under this Agreement, including, but not limited to, the right to terminate this Agreement pursuant to Section 8.2, in addition to Franchisor's rights, if any, under such other agreement(s).
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the franchisor can terminate the Subfranchisor Agreement if the subfranchisor fails to remedy a default within 30 days of written notice, or potentially longer if required by applicable law. The notice will specify the nature of the default. Termination is effective immediately upon expiration of the cure period. The subfranchisor bears the burden of proving they properly and timely cured any default, to the extent a cure is permitted under the agreement.
Additionally, a cross-default provision states that if the subfranchisor defaults on any agreement with Anago or its affiliates, it constitutes a breach of the Subfranchise Agreement, giving Anago the right to terminate the agreement. This termination would be in addition to any rights Anago might have under the other agreement that was breached.
Upon termination or expiration of the agreement, the subfranchisor must comply with all obligations outlined in Article 9 of the agreement, as well as any other obligations that naturally survive the termination or expiration. This includes ceasing operation of the subfranchise business, discontinuing the use of Anago's proprietary marks and confidential information, and assigning client accounts to Anago.