What are the consequences if a franchisee does not comply with the Development Schedule for Afuri Ramen Dumpling?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
e Addendum or the Franchise Agreement. If you do not comply with the Development Schedule, we will have the right to reduce the size of (or change) your Development Area or terminate the Addendum and any of your Franchise Agreements representing Franchises that have not yet opened for business. Thereafter, we and our affiliates will have the right to operate or grant to others the right to operate outlets within your former Development Area. However, your Franchise Territory (defined above) for each of your operating Franchises will remain in force.
Our Use of the Marks and Afuri Products and Services
We retain all rights not specifically granted to you in the Franchise Agreement. This includes our right to use or license the use of our Marks or any other marks to anyone, and for any purpose, and at any location (except that we will not place an Afuri restaurant within your Franchise Territory). Neither we nor our affiliates are restricted from participating in other distribution methods, whether or not within your Franchise Territory, (1) under the Marks, or (2) under marks and product or service configurations different than those offered through your Franchise.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, failure to comply with the Development Schedule can lead to significant repercussions. Afuri Ramen Dumpling has the right to terminate any franchise agreements for locations that have not yet opened if the franchisee fails to meet the opening and continuous operation requirements. This means a franchisee could lose the rights to develop planned locations.
Furthermore, Afuri Ramen Dumpling retains the right to reduce the size of or change the franchisee's Development Area or terminate the Addendum and any franchise agreements for unopened locations if the Development Schedule is not followed. Upon termination, Afuri Ramen Dumpling and its affiliates can then operate or grant others the right to operate outlets within the previously assigned Development Area. However, the Franchise Agreements and Territories for already operating franchises will remain in effect.
The FDD also notes an exception: failure to meet the Development Schedule caused by events beyond the franchisee's reasonable control, such as war, civil disturbance, natural disasters, or labor disputes, will be excused for a period of time deemed reasonable by Afuri Ramen Dumpling. However, financial circumstances are explicitly excluded from these excusable events. It is important to note that the initial franchise fees are non-refundable under any circumstances, meaning that if the agreement is terminated due to non-compliance, the franchisee will not get those fees back.