For Afuri Ramen Dumpling, what is the condition for the franchisee to discontinue selling or offering for sale any such items?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6 NON-COMPETITION COVENANT.
6.1 Covenant. During the term of your association with Franchisee and for two years thereafter, you will not directly or indirectly (including by or through any other person or entity) participate as an owner, director, officer, employee, consultant, licensor, licensee, distributor, or agent, or serve in any other capacity in any business engaged in the offer, sale, or promotion of: (1) ramen, (2) other Japanese style cuisine, (3) Vietnamese pho, or (4) any business that offers products or services that are essentially the same as, or substantially similar to, the products and services that are part of the
System.
6.7 You and Your Owners Not to Compete on Expiration, Termination or Transfer of Agreement.
- 6.7.1 Post-Termination Non-Compete.
This covenant will apply for two years after termination, expiration or transfer of this Agreement.
In express consideration for this Agreement, you will assure that you and your owners, shareholders, partners, directors, officers, employees, and agents, and the members of their immediate families or households (who have actual knowledge of or access to the Operations Manual or System), will not directly or indirectly participate as an owner, shareholder, director, partner, officer, employee, consultant, franchisor, franchisee, distributor, advisor or agent, or serve in any other capacity in any business engaged directly or indirectly in the offer, sale, rental, internet dissemination, or promotion of: (1) ramen, (2) other Japanese style cuisine, (3) Vietnamese pho, or (4) any business that offers products or services that are essentially the same as, or substantially similar to, the products and services that are part of the System.
This covenant applies within the Franchise Territory, within a 50-mile radius of the Franchise Territory, within a 50-mile radius of any location or franchise territory where we operate or have granted the franchise to operate an Afuri business, and within the United States of America.
Certain exceptions may apply if you operate one or more existing restaurants that offer similar food items as provided in the Pre-Existing Business Addendum to this Agreement (Exhibit 4).
- 6.7.2 Your Acknowledgments.
You acknowledge and confirm that the time, content and geographical restrictions contained in this Section are fair and reasonable.
They are not the result of overreaching, duress, or coercion of any kind by us.
You further acknowledge and confirm that your observance of the covenants contained in this Agreement will not cause you any undue hardship, financial or otherwise, and that enforcement of each of the covenants contained in this Agreement will not impair your ability to obtain employment commensurate with your abilities and on terms fully acceptable to you, or otherwise to obtain income required for the comfortable support of your family and the satisfaction of your creditors.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, Section 6.1 outlines the non-competition covenant that restricts a franchisee's involvement in similar businesses during and after their association with the franchise. During the term of the franchise agreement and for two years after, the franchisee is prohibited from participating in any business that offers or promotes ramen, other Japanese-style cuisine, Vietnamese pho, or any products or services substantially similar to those within the Afuri Ramen Dumpling system. This restriction applies to roles such as owner, director, officer, employee, consultant, or agent in any competing business.
Section 6.7.1 further specifies that this non-compete agreement extends to the franchisee, their owners, shareholders, partners, directors, officers, employees, and agents, as well as their immediate family members who have access to the Operations Manual or System. These individuals are barred from participating in businesses engaged in offering, selling, or promoting ramen, other Japanese cuisine, Vietnamese pho, or any business offering substantially similar products and services.
The non-compete covenant applies within the Franchise Territory, a 50-mile radius of the Franchise Territory, a 50-mile radius of any location where Afuri Ramen Dumpling operates or has granted a franchise, and within the United States. However, exceptions may exist for franchisees operating pre-existing restaurants with similar food items, as detailed in the Pre-Existing Business Addendum (Exhibit 4) to the Franchise Agreement. Franchisees acknowledge that these restrictions are fair and reasonable and do not result from overreaching or coercion. They also confirm that adhering to these covenants will not cause undue hardship or impair their ability to obtain suitable employment or income.