Upon termination of an Anago subfranchise agreement, what specific steps must the subfranchisor take to disassociate from Anago?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
ng the Term, and copies of any other documents that Subfranchisor is required to retain for compliance with any applicable law. Subfranchisor agrees it shall be solely responsible for all expenses associated with the copying of the materials.
Section 9.4 - Cessation of Operation
- (a) Subfranchisor will immediately cease operation of the Subfranchise Business and shall not directly or indirectly, at any time or in any manner identify itself or any business as a current or former Anago Subfranchise, franchisee, licensee or dealer of, or otherwise associated with, Franchisor or the System. Without limiting the generality of the foregoing, Subfranchisor shall immediately: (i) cease selling Unit Franchises for the Franchisor; (ii) cease using all advertising materials, forms and other materials bearing the Proprietary Marks; (iii) cease holding itself out as a Subfranchisor of Franchisor; (iv) take all steps necessary to disassociate itself from Franchisor and the System; (v) cease solicitations of Clients; (vi) cease all communication with all Clients; (vii) cease providing services to Unit Franchisees; and (viii) promptly and at its own expense make the alterations Franchisor may specify in the Anago Manuals (or otherwise) to distinguish the Premises clearly from its former appearance in order to prevent public confusion. Franchisor is free to sell new Unit Franchises, enter into new Subfranchise rights agreements or other arrangements in the Area without any obligation to the Subfranchisor. Subfranchisor shall immediately assign all Client Accounts to Franchisor in accordance with Section 9.5 below.
- (b) Subfranchisor shall furnish to Franchisor within thirty (30) days after the effective date of the termination or expiration of this Agreement, evidence satisfactory to Franchisor of Subfranchisor's compliance with the foregoing obligations.
Section 9.5 - Assignment of Unit Franchise Agreements and Client Accounts
Franchisor shall have the right and option, in its sole and absolute discretion, to:
- (a) obtain the assignment of, and Subfranchisor shall assign to Franchisor or its designee, all of Subfranchisor's interest in and to any or all of the Unit Franchisees and Unit Franchise Agreements then in effect for which Franchisor shall not be obligated to pay compensation to Subfranchisor;
- (b) obtain the assignment of, and Subfranchisor shall assign to Franchisor or its designee, all of Subfranchisor's interest in and to any or all Clients and Client Accounts then in effect for which Franchisor shall not be obligated to pay compensation to Subfranchisor;
- (c) terminate any or all of the then-existing Unit Franchise Agreements upon notice to each Unit Franchisee.
Upon the assignment of one or more Unit Franchise Agreements and/or Client Accounts pursuant to this Section 9.5, Subfranchisor does hereby assign and transfer all of its interest in and to such agreements to Franchisor or its designee, and Subfranchisor agrees to execute (and shall cause the applicable Unit Franchisee and/or Client to execute) any documents and take such other
action required or deemed necessary by Franchisor to effect such assignment and transfer. Upon the effective assignment and transfer of any Unit Franchise Agreement and/or Client Account as provided above, Franchisor or its designee shall assume the rights and undertake the obligations arising under such agreements after the effective date of assignment. Neither Franchisor nor its designee shall under any circumstances assume or be liable for any obligation for the performance or obligation or liability for default or nonperformance of Subfranchisor under the particular Unit Franchise Agreement, Client Account or this Agreement (or on any other basis) that arose prior to the effective date of the assignment. Likewise, neither Subfranchisor nor any of its principals shall, under any circumstances, be liable for any obligation for performance or obligation or liability for default or nonperformance under any Unit Franchise Agreement or Client Account or its designee that arises after the effective date of assignment.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Section 9.4 outlines the steps a subfranchisor must take to disassociate from Anago upon termination of the Subfranchise Agreement. The subfranchisor must immediately cease operation of the Subfranchise Business and must not identify itself as a current or former Anago subfranchise, franchisee, licensee, or dealer. This includes ceasing to sell unit franchises, use advertising materials with Anago's proprietary marks, or hold themselves out as an Anago subfranchisor.
To fully disassociate, the subfranchisor must take all necessary steps to separate themselves from Anago and its system. They must cease soliciting clients and communicating with existing clients, as well as stop providing services to unit franchisees. Additionally, the subfranchisor is responsible for making alterations to the premises, as specified in the Anago Manuals, to clearly differentiate it from its former appearance and prevent public confusion. Anago is then free to sell new unit franchises or enter into new subfranchise agreements in the area without any obligation to the former subfranchisor. The subfranchisor must also assign all client accounts to Anago.
Within 30 days after the termination date, the subfranchisor must provide Anago with satisfactory evidence of their compliance with these obligations. Furthermore, according to Section 9.2, the subfranchisor must cancel any fictitious, trade, or assumed name registrations containing "Anago" or any proprietary mark, providing evidence of cancellation to Anago within 30 days of termination. They must also cease using all telephone numbers, websites, social media accounts, and other identifiers associated with the subfranchise business, transferring these to Anago upon request. The subfranchisor must discontinue all use of confidential information, including manuals and client information. Finally, if amounts are due to Anago, the subfranchisor must pay all outstanding amounts owed to Anago and its affiliates.