When must the initial franchise fees be paid for an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
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2 PAYMENT OF FEES AND OTHER FINANCIAL REQUIREMENTS
2.1 Initial Franchise Fee. The Initial Franchise Fee is $45,000. Contemporaneously with the execution of this Agreement, you have paid to us the entire Initial Franchise Fee. The Initial Franchise Fee is paid in consideration of our sales expenses, administrative overhead, return on investment, and start-up costs related to the execution of this Agreement and the opening of the Franchise and for our lost or deferred o
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the initial franchise fee of $45,000 is due contemporaneously with the execution of the Franchise Agreement. This means the franchisee must pay the entire initial fee at the time they sign the agreement.
This upfront payment is for Afuri Ramen Dumpling's sales expenses, administrative overhead, return on investment, and start-up costs related to the execution of the agreement and the opening of the franchise. It also covers the franchisor's lost or deferred opportunity to sell franchises in the franchise territory to others.
It is important to note that, with few exceptions, the initial franchise fee is non-refundable. This is a common practice in franchising, as the fee compensates the franchisor for their initial investment in setting up the franchisee. Prospective franchisees should carefully consider their financial situation and the terms of the agreement before signing and paying the fee, as they will likely not get it back even if they do not open a location.