Under the Anago Collateral Assignment of Lease Agreement, what does 'Event of Default' mean?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignor shall retain right to possession of the Premises in accordance with the terms and conditions of the Lease until the declaration by Assignee of an Event of Default by Assignor under the SRA.
For purposes of this Agreement, the term "Event of Default" shall mean a default by Assignor under the SRA which remains uncured beyond all applicable notice and cure periods.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Collateral Assignment of Lease Agreement specifies that an "Event of Default" refers to a default by the Assignor (franchisee) under the Subfranchise Rights Agreement (SRA). This default must remain uncured even after all applicable notice and cure periods have passed.
In simpler terms, if an Anago franchisee fails to meet their obligations as outlined in the SRA and does not correct the issue within the given timeframe, it constitutes an "Event of Default." This is a critical point because it triggers certain rights for Anago, the Assignee, including the option to assume the lease of the premises.
Anago's ability to assume the lease upon an Event of Default provides them with a mechanism to protect their interests and ensure the continued operation of the franchise. It also means that the franchisee could lose possession of their business location if they fail to comply with the SRA and do not remedy the default within the specified cure period.