Does Nakamura Foods, an affiliate of Afuri Ramen Dumpling, receive rebates from suppliers?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
We and our affiliates may receive rebates, price adjustments, or discounts on products or services sold to you by recommended or approved suppliers. As of the issuance date of this disclosure document, we receive rebates from our designated supplier(s) of private seasonings and kitchen ventilation equipment in the United States. Such rebates are based on franchisee purchases and are 5% of the purchase price. AFURI-USA receives rebates from our designated supplier(s) of cleaning supplies in the United States. Such rebates are based on franchisee purchases and are 5% of the purchase price. Our affiliate, Nakamura Foods, receives rebates from our designated supplier(s) of certain seasonings. Such rebates are based on franchisee purchases and are 5% of the purchase price. We and our affiliate may retain such rebates and use them for any purpose.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 22–26)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, Nakamura Foods, an affiliate of Afuri Ramen Dumpling, does receive rebates from suppliers. Specifically, Nakamura Foods receives rebates from designated suppliers of certain seasonings. These rebates are based on franchisee purchases and amount to 5% of the purchase price. Afuri Ramen Dumpling and its affiliates have the right to retain these rebates and use them for any purpose.
This arrangement means that a portion of the money franchisees spend on certain seasonings is returned to Nakamura Foods as a rebate. While the rebate percentage is fixed at 5%, the actual amount rebated will vary depending on the volume of franchisee purchases. This could potentially incentivize Nakamura Foods to promote the use of these specific seasonings among franchisees to increase rebate revenue.
For a prospective Afuri Ramen Dumpling franchisee, this highlights the importance of understanding the supply chain and the financial relationships between the franchisor, its affiliates, and its suppliers. While the FDD discloses the existence of these rebates, it does not specify how the retained rebate funds are used. A potential franchisee may want to inquire about how these funds benefit the franchise system as a whole.