Under what conditions can Anago obtain assignment of Unit Franchise Agreements from the Subfranchisor without paying compensation?

According to Anago's 2025 Franchise Disclosure Document, Anago has the right and option to obtain assignment of Unit Franchise Agreements from the Subfranchisor without compensation under certain circumstances. Specifically, Anago can exercise this right at its sole and absolute discretion.

This means that if Anago chooses to, it can take over the Unit Franchise Agreements managed by the Subfranchisor. This could occur for a variety of reasons, such as the Subfranchisor's failure to meet performance standards, a change in Anago's business strategy, or other factors deemed relevant by Anago. The FDD does not specify the exact reasons that would trigger Anago's decision, leaving it open to Anago's discretion.

For a prospective Subfranchisor, this clause represents a significant consideration. While the Subfranchisor is responsible for managing and developing Unit Franchises, Anago retains the ultimate authority to step in and assume control of those agreements. This highlights the importance of maintaining a strong working relationship with Anago and adhering to all contractual obligations to minimize the risk of such an assignment. A prospective franchisee should seek clarification from Anago regarding the specific conditions or performance metrics that could lead to the assignment of Unit Franchise Agreements.