Does the FDD require Afuri Ramen Dumpling to include a renewal provision in its franchise agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
the financial statements were available to be issued.
NOTE 3 - FRANCHISING
The Company executes franchise agreements that set the terms of its arrangements with each franchisee. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee of $45,000, which includes required training costs. The franchise agreements also require the franchisee to pay monthly royalty fees based on revenue levels. The franchisee pays marketing fees monthly to cover advertising, market research, and search engine optimization. Subject to the Company's approval and payment
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 FDD, Afuri Ramen Dumpling's franchise agreements generally allow a franchisee to renew their agreement upon expiration. However, this is subject to Afuri Ramen Dumpling's approval and the payment of a renewal fee.
This means that while Afuri Ramen Dumpling typically offers the opportunity to renew, it is not guaranteed. The franchisee must seek approval from Afuri Ramen Dumpling and be prepared to pay a renewal fee, the amount of which is not specified in this excerpt. The franchisor's approval is a critical factor, giving Afuri Ramen Dumpling discretion over who can continue operating under their brand.
Prospective franchisees should inquire about the specific conditions and criteria Afuri Ramen Dumpling uses to grant renewal approvals, as well as the typical range of renewal fees. Understanding these factors will help a franchisee assess the long-term potential and security of their investment with Afuri Ramen Dumpling.