When are Liquidated Damages due from an Afuri Ramen Dumpling franchisee after termination?
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. These damages are payable if the franchisee defaults, leading to the termination of the Franchise Agreement by Afuri Ramen Dumpling.
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. This calculation method aims to compensate Afuri Ramen Dumpling for losses incurred due to the franchisee's default and subsequent termination.
For a prospective Afuri Ramen Dumpling franchisee, this means that in the event of a default and termination, they will be required to pay a significant sum to Afuri Ramen Dumpling. This sum is based on the royalty fees paid over the two years preceding termination. Franchisees should be aware of this potential financial obligation and ensure they understand the terms of the Franchise Agreement regarding default and termination.