Under the Anago Subfranchise Agreement assignment, what does the ASSIGNEE assume from the ASSIGNOR?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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- ASSIGNEE hereby assumes all of ASSIGNOR's obligations, assignments, commitments, duties, covenants and liabilities under the Subfranchise Agreement, and agrees to be bound by and observe and faithfully perform all of the obligations, assignments, commitments and duties of the Subfranchisor under the Subfranchise Agreement with the same force and effect as if the Subfranchise Agreement were originally written with ASSIGNEE as subfranchisor.
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- ASSIGNOR agrees that ASSIGNOR shall continue to be bound by all of the terms, covenants, conditions and obligations of Subfranchisor under the Subfranchise Agreement, including, without limitation, all non-competition, confidentiality and indemnification obligations, and that nothing contained in this Assignment herein shall be deemed to relieve ASSIGNOR of any of ASSIGNOR's obligations in the Subfranchise Agreement. ASSIGNOR further agrees to execute FRANCHISOR's form of personal guaranty, simultaneously with the execution of this Assignment.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, when an ASSIGNOR transfers their rights and interest in the Subfranchise Agreement to an ASSIGNEE, the ASSIGNEE assumes all of the ASSIGNOR's obligations, assignments, commitments, duties, covenants, and liabilities under the Subfranchise Agreement. The ASSIGNEE agrees to be bound by and observe and faithfully perform all of the obligations, assignments, commitments, and duties of the Subfranchisor under the Subfranchise Agreement. This transfer is effective as of the date of the assignment.
In simpler terms, if someone is taking over an existing Anago subfranchise, they are stepping into the shoes of the previous owner (ASSIGNOR) and must fulfill all the responsibilities and promises that the original owner made in the Subfranchise Agreement. This includes any financial obligations, operational duties, and other commitments outlined in the agreement. The ASSIGNEE is legally bound to the same extent as if they were the original subfranchisee.
However, the original ASSIGNOR isn't entirely off the hook. The ASSIGNOR continues to be bound by all the terms, covenants, conditions, and obligations of the Subfranchisor under the Subfranchise Agreement. This includes non-competition, confidentiality, and indemnification obligations. The ASSIGNOR also agrees to execute Anago's form of personal guaranty. This means that even after assigning the agreement, the original subfranchisee remains responsible for certain aspects of the agreement and guarantees the performance of the new ASSIGNEE.
This arrangement provides Anago with an additional layer of security, as both the new and original subfranchisees are responsible for upholding the terms of the agreement. For a prospective ASSIGNEE, it's crucial to thoroughly review the Subfranchise Agreement to fully understand the obligations they are assuming and to assess the financial and operational health of the existing subfranchise. It is also important to understand that the assignor is not released from the original agreement.