Under what conditions can Anago terminate the subfranchise agreement if the Subfranchisor knowingly or willfully violates franchise laws?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor shall comply with, and assist Franchisor to the fullest extent possible in Franchisor's efforts to comply with, the Anti-Terrorism Laws (as defined below). Subfranchisor shall not hire nor have any dealings with any person listed on the SDN List, as it may be modified from time to time. Subfranchisor is solely responsible for ascertaining what actions must be taken by Subfranchisor to comply with all Anti-Terrorism Laws. Subfranchisor specifically acknowledges and agrees that Subfranchisor's indemnification obligations under this Agreement pertain to Subfranchisor's obligations under this Section. Any misrepresentation by Subfranchisor under this Section, or any violation of any Anti-Terrorism Laws by Subfranchisor, Subfranchisor's owners, principals or employees, shall constitute grounds for immediate termination of this Agreement and any other agreement Subfranchisor has entered into with Franchisor or its Affiliates. As used herein, "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the subfranchise agreement can be terminated immediately if the Subfranchisor violates Anti-Terrorism Laws. Specifically, any misrepresentation by the Subfranchisor or any violation of Anti-Terrorism Laws by the Subfranchisor, its owners, principals, or employees constitutes grounds for immediate termination of the agreement.
This clause emphasizes Anago's commitment to complying with all applicable laws and regulations, especially those related to anti-terrorism. It places a significant responsibility on the Subfranchisor to ensure they and their associated parties adhere strictly to these laws. The definition of "Anti-Terrorism Laws" is broad, encompassing various executive orders, regulations, and acts, including the USA PATRIOT ACT.
For a prospective Anago Subfranchisor, this means conducting thorough due diligence to ensure compliance with all Anti-Terrorism Laws. This includes not hiring or dealing with any person listed on the SDN List (Specially Designated Nationals and Blocked Persons List). Failure to comply can lead to immediate termination of the Subfranchise Agreement, highlighting the critical importance of understanding and adhering to these legal obligations.