Under what conditions can ACS terminate the License Agreement with Anago?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ACS owns the Proprietary Marks. Under a license agreement dated June 1, 2012 (the "License Agreement"), ACS granted us a license to use the Proprietary Marks and to sublicense the Proprietary Marks to Subfranchisors throughout the United States and internationally under a Subfranchise Rights Agreement. The License Agreement is for an initial term of 10 years and renews automatically for successive one-year renewal periods. We have the right to renew the License Agreement if we are not in default. ACS has the right to terminate the License Agreement if we commit a default and do not cure the default within the specified time period or if ACS sends us notice of non-renewal 45 days before the expiration of the current term. If the License Agreement is terminated, and ACS does not elect to assume our rights under the Subfranchise Rights Agreement, you will not be permitted to use the Proprietary Marks in the operation of your business and your Subfranchise Rights Agreement may be terminated. There are no other agreements currently in effect that significantly limit our rights to use or license the use of the Proprietary Marks in any manner material to you or your franchisees.
Source: Item 13 — TRADEMARKS (FDD pages 38–41)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, ACS (Anago Cleaning Systems) has the right to terminate its License Agreement with Anago under specific circumstances. ACS can terminate the License Agreement if Anago commits a default and fails to correct it within the specified time period. Additionally, ACS can terminate the agreement by sending Anago a notice of non-renewal 45 days before the current term expires. The License Agreement between ACS and Anago was established on June 1, 2012, for an initial term of 10 years, with automatic one-year renewals.
For a prospective Anago subfranchisee, this information is crucial because the termination of the License Agreement between ACS and Anago could impact their subfranchise agreement. Specifically, if ACS terminates the License Agreement and does not choose to assume Anago's rights under the Subfranchise Rights Agreement, the subfranchisee will no longer be permitted to use the Proprietary Marks in their business operations, and their Subfranchise Rights Agreement may be terminated.
This highlights the importance of Anago remaining in good standing with ACS and adhering to the terms of the License Agreement. Potential subfranchisees should consider this when evaluating the stability and long-term viability of an Anago franchise. It would be prudent to inquire about Anago's relationship with ACS and any potential risks associated with the License Agreement during the due diligence process.