In Michigan, under what conditions can Afuri Ramen Dumpling refuse a transfer of ownership of a franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor.
all lawful obligations.
- (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any breach in the Franchise Agreement existing at the time of the proposed transfer.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, Michigan law includes specific provisions regarding franchise agreements, and some provisions that might typically allow a franchisor to refuse a transfer are void and unenforceable in Michigan.
Specifically, Afuri Ramen Dumpling cannot refuse a transfer merely because the proposed transferee is a competitor. Additionally, Afuri Ramen Dumpling cannot refuse a transfer if the franchisee or proposed transferee has failed to pay sums owing or cure a breach of the Franchise Agreement at the time of the proposed transfer.
These stipulations protect Michigan franchisees from potentially restrictive transfer conditions, ensuring a fairer process for selling their business. However, it is important to note that other lawful obligations must still be met for a transfer to proceed.