Is the grant to operate an Afuri Ramen Dumpling franchise limited to a single location?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- 1.2 One Location for Franchise. You will operate the Franchise only at the Franchise Premises. If not determined when this Agreement is executed, you are responsible for selecting the site for the Franchise Premises within the search area ("Search Area") outlined in Exhibit 1 and in accordance with this Agreement.
1.3 Assistance in Site Location.
1.1.4 Co-Branding. Some Afuri franchises may be placed at a location where another, separate business is operated under another business name. If the Franchise Premises is at that type of location, it will be deemed "co-branded" for the purposes of this Agreement. If the Franchise Premises is located in a co-branded location, the exact basis and calculation of Revenue will follow the requirements and procedures we outline in the Operations Manual. If the Franchise Premises is located in a co-branded location, you will obtain and keep, or make arrangements for us to have access to, a complete and accurate set of books and records of the operation of all businesses operated at and all business done through the cobranded location, although Revenue will be limited to Afuri related receipts.
1.7 Rights We Reserve.
We retain all rights not specifically granted to you under this Agreement.
We retain the right, in our sole discretion and without granting any right to you:
A. to use or license the use of the Marks or any other trademarks, service marks, logos or commercial symbols to anyone, and for any purpose, and at any location (except that we will not place an Afuri restaurant with your Franchise Territory).
B. to sell products or services anywhere, including within the Franchise Territory, using the Marks or different marks, through channels of distribution other than the Afuri restaurant franchise granted to you by this Agreement.
We will have no obligation to compensate you for any such sales made within your Franchise Territory.
For example, we may place Afuri establishments in airport and mall food courts, stadiums, and similar limited access environments in your Franchise Territory and regardless of the location of other Afuri operations.
We may place present and future Afuri products for sale in grocery stores and food markets at any location, whether or not within the Franchise Territory or within close proximity to an Afuri franchise.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling FDD, the franchise agreement generally grants the franchisee the right to operate only one location. Specifically, the franchisee is required to operate the franchise solely at the designated Franchise Premises. The franchisee is responsible for selecting the site within a defined search area, as outlined in an exhibit to the agreement, if the location hasn't already been determined when the agreement is executed.
This single-location restriction means that an Afuri Ramen Dumpling franchisee's operations are confined to a specific, pre-approved site. This limits the franchisee's ability to expand without obtaining additional franchise agreements. However, the FDD also mentions the possibility of "co-branding," where an Afuri Ramen Dumpling franchise operates at a location alongside another separate business. In such cases, the franchisee must maintain accurate records for both businesses, although revenue calculations are limited to Afuri-related receipts.
Afuri Ramen Dumpling retains certain rights, including the right to use its trademarks and sell products through other channels, even within the franchisee's territory. They may establish Afuri establishments in locations like airport and mall food courts, stadiums, and sell Afuri products in grocery stores, regardless of the proximity to the franchised location. These stipulations could impact a franchisee's potential revenue and market share, as Afuri Ramen Dumpling can explore alternative distribution methods within the same territory.