In the Afuri Ramen Dumpling agreement, what happens if there are contemporaneous agreements?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1.3 The Pre-Existing Business(es) will continue to be operated separately and independently from the Afuri franchise.
- 1.4 Any and all existing franchise agreements, stockholder agreements, membership agreements, partnership agreements, option agreements, or any other agreements or third-party rights relating to the Pre-Existing Business, do not contain any covenants, terms and conditions which do now, or may in the future, prohibit the execution of the Franchise Agreement and the participation of any of the owners, managers or employees of the Franchisee in the Afuri franchise.
- 1.5 Other than the consents of Franchisee and Franchisor, there is no other third-party consent required for the acquisition of the Afuri franchise to be legally binding and effective.
- 1.6 There are no existing restrictive covenants, other than those which the Pre-Existing Business has waived, binding on Franchisee or any of its partners, owners, agents, representatives or employees that would be breached by the acquisition and operation of the obligations of Franchisee to Franchisor in the Franchise Agreement and related agreements.
- 1 Afuri Franchise Agreement: Exhibit 4 2. Exceptions to In-Term and Post-Term Non-Competition Covenants. Franchisee (or its owners or affiliated entities) may continue to operate the Pre-Existing Business(es) *[Alternative #1: only
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, the franchise agreement addresses scenarios where a franchisee has pre-existing businesses or agreements. Specifically, if a franchisee operates a pre-existing business, it must continue to be operated separately and independently from the Afuri Ramen Dumpling franchise.
Furthermore, any existing agreements related to the pre-existing business, such as franchise agreements, stockholder agreements, or partnership agreements, must not contain terms that would prohibit the franchisee from entering into the Afuri Ramen Dumpling Franchise Agreement or prevent the owners, managers, or employees from participating in the Afuri Ramen Dumpling franchise. The acquisition of the Afuri Ramen Dumpling franchise must not require any third-party consent to be legally binding, other than the consents of the franchisee and franchisor.
Additionally, there should be no existing restrictive covenants binding on the franchisee or its partners, owners, agents, representatives, or employees that would be breached by the franchisee's obligations to Afuri Ramen Dumpling under the Franchise Agreement. The franchisee may continue to operate pre-existing businesses, even if they offer similar goods and services, notwithstanding the non-competition covenants in the Franchise Agreement. However, the confidentiality and nondisclosure covenants of the Franchise Agreement remain in full effect.