What agreement must be entered into regarding the transferee's obligations when transferring an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
e believe based upon a review of the transferee's operational and business plans that the transferee's business operations might not be beneficial on a cash flow or financial basis.
- 7.1.3 We need not consent to any transfer to a competitor of ours.
- 7.1.4 We enter this Agreement, in part, in reliance upon the individual or collective character, skill, attitude, business ability and financial capacity of you (or your shareholders, members or partners, if you are a corporation, limited liability company, partnership or other entity).
- 7.1.5 You recognize that there are many subjective factors that comprise the process by which we select a suitable franchise owner. Our consent to a transfer by you will remain a subjective determination and will include, but not be limited to the following conditions. Before the effective date of a transfer we approve:
- A. The transferee must assume your Franchise obligations. You will remain bound by your covenants in this Agreement to not disclose Confidential Information and to not compete with us or our franchisees.
- B. You will pay all ascertained or liquidated debts concerning the Franchise.
- C. You may not be in breach of this Agreement or any other agreement between the parties. Our consent to the transfer will not constitute a waiver of any claims we may have against you.
- D. The transferee will pay for and complete to our exclusive satisfaction the training programs we then require of new franchisees or otherwise show to our satisfaction sufficient ability to successfully operate the Franchise.
- E. You or the transferee will pay a Transfer Fee according to our then-current Transfer Fee Schedule. This fee will reimburse us for our reasonable legal, accounting, credit check, and
investigation expenses that result from the transfer, as well as the mandatory training program for the transferee. The current Transfer Fee is $30,000.
- F. You or the transferee will refurbish, remodel, and replace the Franchise Premises, fixtures, equipment, delivery vehicles (if applicable), and signage to conform to our then-current Operations Man
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, a transferee must assume the existing franchisee's obligations when transferring a franchise. The original franchisee remains bound by agreements not to disclose confidential information and not to compete with Afuri Ramen Dumpling or its franchisees.
Before the transfer is approved, the franchisee must settle all debts related to the franchise and cannot be in breach of the franchise agreement or any other agreements with Afuri Ramen Dumpling. The transferee is required to complete the training programs that Afuri Ramen Dumpling requires of new franchisees or otherwise demonstrate the ability to successfully operate the franchise.
Additionally, either the franchisee or the transferee must pay a transfer fee, which, as of the FDD's publication, is $30,000. This fee is intended to cover Afuri Ramen Dumpling's expenses for legal, accounting, credit checks, investigation, and the transferee's mandatory training. The franchisee or transferee must also refurbish, remodel, and replace the franchise premises, fixtures, equipment, delivery vehicles (if applicable), and signage to meet the current standards outlined in Afuri Ramen Dumpling's Operations Manual and System standards. If Afuri Ramen Dumpling obtains the transferee for the franchisee, the franchisee must pay Afuri Ramen Dumpling a 10% commission on the gross transfer price, excluding the price of real property. Finally, the transferee must execute all documents that Afuri Ramen Dumpling requires of new franchisees.