What aspects of the transferee does Afuri Ramen Dumpling rely upon when entering into a transfer agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
e in consideration for Franchisor's legal, accounting, credit check, training and investigation expenses incurred as a result of this transfer. [In addition, Franchisee has paid to Franchisor, contemporaneous with execution of this Agreement, a percent commission on the gross transfer price (excluding the price of real property), in the amount of $ . Franchisor acknowledges receipt of this amount in consideration for having obtained Transferee for Franchisee.]
- H. Transferee has met the standards established by Franchisor for quality of character, financial capacity and experience required of a new or renewing Afuri franchisee. Franchisee and Transferee have provided to Franchisor such information as Franchisor reasonably requested to evidence that Transferee meets these standards.
- I. The lessor or sublessor of the Franchise Premises has consented to the assignment or sublease of the Franchise Premises to Transferee.
- J. Franchisee and Transferee agree to subordinate to Transferee's obligations to Franchisor (including, without limitation, the payment of all franchise fees) any obligations of Transferee to Franchisee.
- K. Transferee will assume possession and control of the equipment, furnishings, signs, supplies, inventory, advance paid deposits and other personal property and fixtures located on the Franchise Premises, except as follows:
- L. Franchisee will properly operate the franchises and maintain the Franchise Premises in clean and proper working order and will continue the employment of all current employees until Transferee assumes control of the businesses and [relocates] the Franchise Premises.
- M.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company relies on several aspects of a potential transferee before approving a franchise transfer. These include the transferee's character, financial capacity, and experience. The transferee must meet the standards established by Afuri Ramen Dumpling for new or renewing franchisees, and must provide information reasonably requested by the company to demonstrate that they meet these standards.
In addition to these qualifications, the transferee must also assume the existing franchisee's obligations, complete the training programs required by Afuri Ramen Dumpling for new franchisees, and execute all documents required of new franchisees. The transferee must also pay a transfer fee to cover Afuri Ramen Dumpling's legal, accounting, and investigation expenses, as well as the cost of the mandatory training program. As of the date of the FDD, the current transfer fee is $30,000.
Furthermore, the transferee may be required to refurbish, remodel, and replace the franchise premises to conform to Afuri Ramen Dumpling's current standards. If Afuri Ramen Dumpling obtains the transferee for the franchisee, the franchisee will pay Afuri Ramen Dumpling a 10% commission on the gross transfer price (excluding the price of real property). The lessor or sublessor of the franchise premises must also consent to the assignment or sublease of the premises to the transferee. Finally, the transferee's obligations to the franchisee must be subordinate to the transferee's obligations to Afuri Ramen Dumpling, including the payment of all franchise fees.