Under what conditions is the Anago Subfranchise Fee refundable to the Subfranchisor?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
using
the same authorization that Subfranchisor grants Franchisor with respect to payment of Royalty and other fees.
ARTICLE 4 - SUBFRANCHISE FEE AND COMPENSATION
Section 4.1 - Subfranchise Fee
Subfranchisor will pay to Franchisor a Subfranchise Fee in the amount of $98,000. The Subfranchise Fee is fully earned by Franchisor and is non-refundable upon signing this Agreement in consideration for the administrative and other costs incurred by Franchisor and opportunities lost or
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Subfranchise Fee of $98,000 is generally non-refundable once the Subfranchise Agreement is signed. Anago considers the fee fully earned upon signing, citing administrative costs, other incurred costs, and lost opportunities as justification for this policy. This is a fairly standard practice in franchising, as the initial fee compensates the franchisor for the initial setup and granting of rights.
However, there are two specific circumstances under which the Subfranchise Fee may be refundable to the Subfranchisor. First, if Anago does not accept the Subfranchisor at its home office within 30 days from the Agreement Date, the fee is refundable. This clause protects the Subfranchisor in case Anago determines they are not a suitable fit shortly after the agreement is signed. Second, the Subfranchise Fee is refundable as provided in Subsection 2.1(b), although the excerpt does not specify the conditions outlined in Subsection 2.1(b).
It is important for prospective Anago subfranchisees to understand these conditions, as the $98,000 Subfranchise Fee represents a significant initial investment. Subfranchisees should clarify the details of Subsection 2.1(b) with Anago to fully understand all potential refund scenarios. They should also be aware that, outside of these specific conditions, the fee is non-refundable, even if the subfranchise is later terminated.