When are Liquidated Damages due for an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Date Due | Remarks |
|---|---|---|---|
| Franchise Agreement Section 5.1). | |||
| Non-Cash Payment Systems | All costs associated with non-cash payment systems | As incurred | You must accept debit cards, credit cards, stored value gift cards or other non-cash payment systems we specify. |
| Manual Replacement Fee | $500 | On demand | You pay this fee if you lose the copy of the Operations Manual we loan to you. |
| Re-Inspection Fee | $500 per re-inspection | On demand | You pay this fee if we must re-visit your location for an inspection after you have already been notified of any deficiency or non- satisfactory condition. |
| Liquidated Damages | An amount equal to two times the total Royalty Fees paid (or if unpaid, payable) by you during the 24 months before the termination date. | Within 30 days following the date of termination. | Payable if you default and we terminate your Franchise Agreement. |
| Sanitation and Food Safety Audits | Cost of the inspection | On demand | We may, in our sole discretion, contract with a third party to conduct sanitation and food safety audits during the term of your Franchise Agreement. |
| Business/Financial Audit7 | Our reasonable costs for the audit if you understate revenue by more than 2% or fail to deliver to us required reports on time | Immediately upon demand | See notes below. |
| Participation in Advisory Council | As incurred | As incurred | If you participate on an Advisory Council, you will pay any costs you incur related to your participation, such as travel and living expenses to attend |
Source: Item 6 — Other Fees (FDD pages 11–16)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, liquidated damages are due within 30 days following the date of termination of the franchise agreement. This payment is required if the franchisee defaults on the agreement and Afuri Ramen Dumpling terminates the agreement as a result.
The amount of liquidated damages is calculated as two times the total royalty fees paid (or payable) by the franchisee during the 24 months before the termination date. For a prospective franchisee, this means that if the franchise agreement is terminated due to default, they will be responsible for paying a significant sum based on prior royalty payments.
It is important for a prospective Afuri Ramen Dumpling franchisee to understand the conditions under which the franchise agreement can be terminated and the potential financial implications of such termination. Understanding these terms can help in making an informed decision about investing in an Afuri Ramen Dumpling franchise and managing the business to avoid default.