If the Afuri Ramen Dumpling franchisee is a business entity, what obligations do the owners have?

According to the 2024 Afuri Ramen Dumpling FDD, when the franchisee is a business entity such as a corporation, partnership, or limited liability company, the term "you" also encompasses any corporation, partnership, limited liability company, individual, or combination of individuals that owns a majority interest in the franchisee or in which the franchisee owns a majority interest. This means that the obligations extend beyond just the business entity itself to include those with significant ownership stakes.

This definition ensures that individuals with controlling interests in the franchisee entity are also bound by the terms of the Franchise Agreement. This is a common practice in franchising to prevent individuals from circumventing their obligations by operating through a corporate shield. It also means that Afuri Ramen Dumpling can pursue those individuals directly if the franchisee entity fails to meet its obligations.

Furthermore, the FDD states that the term "you" will include all persons who succeed to your interest by transfer or by operation of law. This means that if ownership of the franchise changes, the new owners will also be subject to the terms of the Franchise Agreement. This provision ensures the continuity of the franchise agreement even if the ownership structure changes over time. Prospective franchisees should carefully review the Franchise Agreement to fully understand their obligations and the obligations of those with controlling interests in their business entity.