Under what circumstances can Anago terminate the Subfranchise Agreement without allowing the Subfranchisor an opportunity to cure?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
h (a) above dies during the Term, the interests of that individual in a corporate, partnership or limited liability company Unit Franchisee (or in any owner of the Unit Franchisee) or in this Agreement are required to be transferred within 6 months of the death to an approved transferee in accordance with the terms of this ARTICLE.
ARTICLE 11 - DEFAULT AND TERMINATION
SECTION 11.1 TERMINATION BY YOU.
You do not have the right to terminate the Agreement prior to its expiration without written consent from Us.
SECTION 11.2 TERMINATION BY US - WITHOUT NOTICE.
- (a) Subject to applicable law, this Agreement automatically terminates without notice or opportunity to cure on the date of the occurrence of any of the following Events of Default:
- (i) if You damage the Anago System through violation of federal, state or local environmental laws;
- (ii) if You become insolvent or make a general assignment for the benefit of creditors;
- (iii) You file a petition in bankruptcy or a petition is filed against or consented to by You and the petition is not dismissed within 45 days;
- (iv) You are adjudicated as bankrupt;
- (v) a bill in equity or other proceeding for the appointment of a receiver or other custodian for Your business or assets is filed or consented to by You;
- (vi) a receiver or other custodian (permanent or temporary) of Your business or assets is appointed by any court of competent jurisdiction;
- (vii) proceedings for a composition with creditors under federal or any state law is begun by or against You;
- (viii) a final judgment in excess of $5,000 remains unsatisfied or
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago can terminate the Subfranchise Agreement without notice or opportunity to cure under specific circumstances. These events include damaging the Anago System through violation of environmental laws, becoming insolvent, making an assignment for the benefit of creditors, filing for bankruptcy (or having a petition filed against them that is not dismissed within 45 days), being adjudicated bankrupt, or facing proceedings for the appointment of a receiver.
Additional conditions that allow Anago to terminate the agreement without an opportunity to cure involve the appointment of a receiver for the business, the commencement of proceedings for composition with creditors, an unsatisfied final judgment exceeding $5,000 for 30 days or longer (unless a supersedeas bond is filed), execution levied against the operation or property, or the sale of a substantial portion of real or personal property after levy. The subfranchisor is required to notify Anago within 3 days of any of these events.
These termination rights are standard in franchising, designed to protect the franchisor's brand and system from damage caused by a subfranchisee's severe mismanagement or financial instability. The lack of a cure period in these instances reflects the urgency and potential harm associated with such events. A prospective Anago subfranchisee should understand these conditions and ensure they have robust financial and operational management to avoid triggering these termination clauses.