Under what circumstances will Anago NOT pay a franchisee for one-time services?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
Notwithstanding the foregoing, Subfranchisor shall refer all National Accounts to Franchisor.
Subfranchisor shall not enter into any contracts with National Accounts without first obtaining Franchisor's written consent.
Franchisor reserves the right to, either itself or through its designee, enter into contracts for the performance of Anago services to National Accounts. wherever or however the National Account is originated. "National Account" means any client or prospective client that, directly or though its affiliates: (i) owns, manages, operates, controls, or is responsible for ten (10) or more locations in your Area; (ii) owns, manages, operates, controls or is responsible for multiple locations, one or more of which is in your Area and one or more of which is outside of your Area; and (iii) requests that we or our affiliates submit or allow us or our affiliates to submit a response to a request for proposals ("RFP") and we determine that you do not meet the National Account's qualifications to submit an RFP response or enter into the contract.
If Franchisor signs a contract with a National Account with locations in Subfranchisor's Area, and it is not prohibited from doing so under its contract with the National Account, Franchisor may provide Subfranchisor the option, on terms and conditions specified by Franchisor and on a non-exclusive basis, to license Unit Franchisees in the Area to perform services for National Account locations within the Area.
- (b) With the exception of National Accounts, Subfranchisor shall enter into Client contracts in the form approved by Franchisor (a "Client Account") agreeing to provide Anago janitorial and other approved facilities-related services to such Client through Unit Franchisees in
the Area. Subfranchisor acknowledges and agrees that Franchisor shall own all rights in and to all Clients and Client Accounts upon default, termination or expiration of this Agreement.
Franchisor may independently consult with each Unit Franchisee and Client to determine the amount of funds the Unit Franchisee is owed.
During the Default Period, Subfranchisor agrees to cooperate fully with Franchisor to expedite full and timely payment to each Unit Franchisee.
Subfranchisor will furnish to Franchisor, within 48 hours of Franchisor's request, a copy of all prior client invoices regarding services and supplies provided to all Clients in the Area and Unit Franchisees.
- (g) Right of Offset.
Franchisor, at its option, may for a period of one year after written notice of default, as described in Subsection 2.4(f), immediately deduct from amounts paid to Subfranchisor on its Client receipts, any amounts owed to Franchisor.
(h) Assumption of Processing. Franchisor, upon default of this Agreement or at the request of Subfranchisor, may, at its sole option, assume the processing of Client invoices and Unit Franchisee statements for an indefinite period. In such an event, Franchisor will charge Subfranchisor a monthly accounting fee equal to $1,000.00 or 1% of monthly Gross Revenues (whichever is greater), plus the cost of postage. Additionally, Franchisor will charge Subfranchisor a $25.00 accounting fee per Unit Franchisee monthly statement. The accounting fees will be withheld from amounts due to Subfranchisor in the week the costs for processing were incurred.
Section 2.4 - Billing and Collection System
(a) Invoicing. Under the Unit Franchise Agreements, each Unit Franchisee appoints Subfranchisor as its agent for purposes, throughout the term of the Unit Franchise Agreement, of billing and collecting for services the Unit Franchisee provides to its Clients. Subfranchisor hereb
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
Based on the 2025 FDD, Anago subfranchisors act as agents for unit franchisees in billing and collecting payments for services rendered to clients. However, Anago retains specific rights regarding National Accounts, which could impact a subfranchisor's compensation. A "National Account" is defined as a client with multiple locations (ten or more in the subfranchisor's area, or locations both inside and outside the area) or one that requests a proposal that the subfranchisor is not qualified to submit. Anago retains the right to contract directly with these National Accounts.
If Anago secures a contract with a National Account within a subfranchisor's area, it may offer the subfranchisor the option to have its unit franchisees perform the services, but this is on a non-exclusive basis and under terms and conditions set by Anago. This means the subfranchisor is not guaranteed the business, and the compensation terms are dictated by Anago, not the subfranchisor's standard agreement with unit franchisees.
Furthermore, Anago has a "Right of Offset," allowing them to deduct amounts owed to Anago from payments to the subfranchisor for client receipts, particularly after a written notice of default. Anago can also assume the processing of client invoices and unit franchisee statements upon default or at the subfranchisor's request, charging the subfranchisor a monthly accounting fee of $1,000 or 1% of monthly gross revenues (whichever is greater), plus postage costs, and a $25 accounting fee per unit franchisee monthly statement. These fees are withheld from amounts due to the subfranchisor. Therefore, a subfranchisor's payments can be affected by defaults, National Accounts managed directly by Anago, and Anago's assumption of invoice processing.