What happens if an Afuri Ramen Dumpling franchisee breaches the non-diversion of business clause?

According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, if a franchisee breaches the non-diversion of business clause, they are obligated to indemnify, defend, and hold harmless Afuri Ramen Dumpling and its affiliates. This means the franchisee is responsible for covering all losses, costs, legal proceedings, judgments, liabilities, expenses (including court costs), and reasonable attorney and professional fees that arise from the breach. This obligation extends to any breach of representations and warranties, the operation of any pre-existing business, or any willful or negligent act or omission by the franchisee, their owners, directors, officers, employees, or agents. This indemnification clause remains in effect even after the termination of the Franchise Agreement.

The indemnity covers a wide range of potential damages, including economic damage, bodily injury, sickness, disease, or death, stemming from the franchisee's actions or omissions. This provision is in addition to, and does not reduce the scope of, any other indemnification provisions outlined in the Franchise Agreement.

In essence, this clause places a significant financial burden on the franchisee if they fail to comply with the non-diversion of business clause. It protects Afuri Ramen Dumpling from financial and legal repercussions resulting from the franchisee's breach, ensuring that the franchisor is compensated for any damages incurred due to the franchisee's actions. Prospective franchisees should carefully consider this indemnification clause and understand the potential financial risks associated with breaching the non-diversion of business clause.