Under what conditions can Anago deduct amounts owed to them from my client receipts after a default?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Internet access installed within your computer.
(iv) Billing and Collection Procedures Upon Your Default.
(i) During any period that you are in default of the Subfranchise Rights Agreement but the Subfranchise Rights Agreement is not terminated, and for 90 days, or more, thereafter (the "Default Period"), we may deposit and hold in the Anago Escrow Account certain client receipts (the "Escrow Receipts"), less any funds owed to us or our affiliates for Royalties, Administrative Support fees, Insurance fees, accounting fees, service fees (bank fees, credit card fees, or other fees relating to billing and collections), advertising fees, late fees, temporary management fees, interest, and any other payments due to Franchisor its affiliates hereunder. The Escrow Receipts may be held by us and distributed directly to the Unit Franchisees to ensure timely and accurate payment. We will pay directly to each Unit Franchisee the Escrow Receipt owed; less amounts due as delineated in the Unit Franchise Agreement. Your residual amounts may remain in the Anago Escrow Account for
the duration of the Default Period, and may be offset by amounts owed to us. We will be obliged to pay each Unit Franchisee only for receipts that we/you deposit into the Anago Escrow Account.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–36)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago may deduct amounts owed to them from a subfranchisee's client receipts under specific default conditions.
During any period that a subfranchisee is in default of the Subfranchise Rights Agreement, but the agreement is not terminated, and for 90 days or more thereafter (referred to as the "Default Period"), Anago may deposit and hold certain client receipts in the Anago Escrow Account. From these Escrow Receipts, Anago can deduct any funds owed to them or their affiliates. These owed funds can include Royalties, Administrative Support fees, Insurance fees, accounting fees, service fees (such as bank fees or credit card fees), advertising fees, late fees, temporary management fees, interest, and any other payments due to Anago or its affiliates under the agreement.
Anago will then pay the Unit Franchisees directly from the Escrow Receipt, deducting any amounts due as outlined in the Unit Franchise Agreement. The subfranchisee's residual amounts may remain in the Anago Escrow Account for the duration of the Default Period. Additionally, Anago may immediately deduct any amounts owed to them from payments made to the subfranchisee on client receipts for a period of one year after written notice of default, as described in Subsection 2.4(f)(i) of the Subfranchise Rights Agreement.