Besides Afuri Ramen Dumpling, what other entities might a franchisee have to pay fees to?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
up>* Unless otherwise specified in this Item 6, all fees are imposed by and payable to us, are uniformly imposed, and are non-refundable. Fees and payments that may be payable to third parties include fees for Non-Cash Payment Systems and Sanitation and Food Safety Audits.
Notes:
- Revenue and Reporting. "Revenue" means all receipts generated by the franchise from any source including sales, exchanges, services, sales from delivery services (including direct delivery and delivery via third-party delivery services, without deducting third-party delivery service fees), or any other benefit or value that is received or deferred to be received. Credit sales shall be calculated as of the date of sale without deduction for uncollected credit accounts. "Revenue" shall not include bona fide credits for returns, promotional discounts, or the amounts collected and paid to appropriate governmental authorities under the provisions of any Sales Tax, Retailer's Occupation, or similar Act. The proceeds from any business interruption insurance or eminent domain recovery you receive are included in "Revenue."
You will deliver to us, as outlined in the Operations Manual, an itemized report of your Revenue for the preceding month. The report must be in the form we designate. All Royalty Fee, Advertising Fee and other fee payments based upon the Revenue for the preceding month must be submitted with the report.
Taxes. You must pay any taxes imposed as a result of your payment to us of initial or ongoing fees.
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- Automatic Withdrawal. We may require you to make fee payments by automatic account withdrawal or other automatic processes we reasonably specify in the Operations Manual, such as check, cash, certified check, money order, credit or debit card, automatic pre-authorized payment plan, electronic funds transfer or the Internet.
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- Advertising Fee. The Advertising Fee is described in more detail in Item 11 of this disclosure document. Advertising Fee payments are in addition to and exclusive of any sums that you may decide to spend on local advertising and promotion.
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- Regional Advertising Cooperative.
Source: Item 6 — Other Fees (FDD pages 11–16)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, franchisees may be required to pay fees to entities other than the franchisor. Specifically, franchisees may incur costs related to non-cash payment systems and sanitation and food safety audits, which are payable to third-party providers. Additionally, if 75% of franchisees in a specific advertising region vote to contribute to a regional advertising program, all franchisees within that region, excluding company-owned outlets, will be obligated to pay into a regional advertising fund. This contribution cannot exceed 2% of the franchisee's revenue. Franchisees must also pay any taxes imposed as a result of their payment to the franchisor of initial or ongoing fees.
For a prospective Afuri Ramen Dumpling franchisee, this means budgeting for potential expenses beyond those directly paid to the franchisor. The costs associated with non-cash payment systems, such as debit card and credit card processing fees, can vary depending on the provider and transaction volume. Similarly, the cost of sanitation and food safety audits will depend on the third-party vendor contracted by the franchisor. Participation in a regional advertising cooperative is contingent on the vote of other franchisees in the region, but if approved, it becomes a mandatory expense.
It is important for potential Afuri Ramen Dumpling franchisees to factor in these additional costs when evaluating the overall financial investment and potential profitability of the franchise. Understanding the terms and conditions of these fees, as outlined in the Franchise Agreement and Operations Manual, is crucial for making an informed decision. Franchisees should also inquire about the typical costs associated with these third-party services in their specific region to develop a realistic financial projection.