When does the Multiple Franchise Purchase Addendum for Afuri Ramen Dumpling expire?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
The Addendum will expire at the earlier of the following: (1) the opening of your last Franchise under your Development Schedule (described in the Multiple Franchise Purchase Addendum); or (2) the termination of the Addendum under to the terms and conditions of the Addendum or the Franchise Agreement. If you do not comply with the Development Schedule, we will have the right to reduce the size of (or change) your Development Area or terminate the Addendum and any of your Franchise Agreements representing Franchises that have not yet opened for business. Thereafter, we and our affiliates will have the right to operate or grant to others the right to operate outlets within your former Development Area. However, your Franchise Territory (defined above) for each of your operating Franchises will remain in force.
Source: Item 12 — Territory (FDD pages 34–37)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the Multiple Franchise Purchase Addendum, which is used when a franchisee purchases multiple franchises simultaneously, has two potential expiration conditions. The addendum will expire when the last franchise under the development schedule is opened. Alternatively, it can expire upon the termination of the addendum based on its own terms and conditions or those within the Franchise Agreement.
This means that for a franchisee who signs a Multiple Franchise Purchase Addendum, the agreement's duration is tied to their ability to adhere to the development schedule outlined in the addendum. If the franchisee successfully opens all franchises as planned, the addendum remains in effect until the opening of the final franchise. However, failure to comply with the development schedule can lead to negative consequences.
Afuri Ramen Dumpling retains the right to reduce the size of the development area or even terminate the addendum and any franchise agreements for locations that have not yet opened if the franchisee fails to meet the development schedule. This could result in the franchisee losing the rights to develop additional locations within the initially agreed-upon area. After such a termination, Afuri Ramen Dumpling and its affiliates are free to operate or grant others the right to operate outlets within the franchisee's former development area. It is important to note that even if the addendum is terminated, the Franchise Territory for each operating franchise remains in force, meaning the franchisee retains the rights to operate their existing locations.
Therefore, prospective Afuri Ramen Dumpling franchisees considering a multiple franchise purchase should carefully review the terms of the Multiple Franchise Purchase Addendum and the development schedule. They should ensure they have the resources and capabilities to meet the agreed-upon timeline for opening new locations to avoid potential loss of development rights.