Under what conditions can Anago reduce the size of the Subfranchisor's Area?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor reserves the right to, either itself or through its designee, enter into contracts for the performance of Anago services to National Accounts. wherever or however the National Account is originated. "National Account" means any client or prospective client that, directly or though its affiliates: (i) owns, manages, operates, controls, or is responsible for ten (10) or more locations in your Area; (ii) owns, manages, operates, controls or is responsible for multiple locations, one or more of which is in your Area and one or more of which is outside of your Area; and (iii) requests that we or our affiliates submit or allow us or our affiliates to submit a response to a request for proposals ("RFP") and we determine that you do not meet the National Account's qualifications to submit an RFP response or enter into the contract.
If Franchisor signs a contract with a National Account with locations in Subfranchisor's Area, and it is not prohibited from doing so under its contract with the National Account, Franchisor may provide Subfranchisor the option, on terms and conditions specified by Franchisor and on a non-exclusive basis, to license Unit Franchisees in the Area to perform services for National Account locations within the Area.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
Based on the 2025 Anago Franchise Disclosure Document, Anago may impact a Subfranchisor's area through National Accounts. A "National Account" is defined as a client or prospective client that meets one of three criteria: (i) controls ten or more locations in the Subfranchisor's Area; (ii) manages multiple locations, some inside and some outside the Subfranchisor's Area; or (iii) requests a proposal where Anago determines the Subfranchisor doesn't meet the qualifications.
If Anago secures a contract with a National Account that has locations within the Subfranchisor's Area, Anago has the option to allow the Subfranchisor to license Unit Franchisees to service those locations. However, this is done on a non-exclusive basis and under terms and conditions set by Anago. This means Anago retains control over these key accounts and can dictate how they are serviced.
This arrangement has significant implications for Subfranchisors. While they may gain access to National Account business, it's not guaranteed, and the terms are subject to Anago's discretion. Subfranchisors do not have the right to contract with National Accounts without Anago's written consent. A prospective franchisee should seek clarification from Anago regarding the process for securing National Accounts, the typical terms offered to Subfranchisors, and the potential impact on their revenue and business growth.