factual

What payments are due to Afuri Ramen Dumpling within seven days of termination?

Afuri_Ramen_Dumpling Franchise · 2024 FDD

Answer from 2024 FDD Document

  • D. Sell to us your interest in the Franchise, the Franchise Premises, if any, and all related equipment, fixtures, signs, real estate leases, equipment leases and personal property. Unless we state in writing that we do not intend to exercise this right, the parties must agree upon a purchase price and terms within 5 business days after termination of this Agreement. If not, a fair value and fair terms will be determined by appraisal as provided in section 7.6 (entitled "Appraisals").
  • 6.5.7 Upon termination for any reason, you will return to us all proprietary and confidential materials, including customer lists and account information, keys, codes, signage, advertising and marketing materials, service agreements and other forms, printed files, security codes, and additional similar items and information as may be described in the Operations Manual. If you fail to return or cease use of any of these items, we may enter your business premises without being guilty of trespass or any other tort to remove and retain the items. You will pay to us, on demand, any expenses we incur in trying to remove or collect such items or in attempting to have you cease use of them.
  • 6.5.8 Damages and Liquidated Damages. Upon termination pursuant to any default by Franchisee, Franchisee agrees to pay Afuri all actual and consequential damages and any costs and expenses (including reasonable attorneys' fees) incurred by Afuri as a result of such default and termination. Franchisee acknowledges and agrees that it does not have the right to terminate this Agreement, except as provided in Section 6.2, or as otherwise agreed in writing by the parties, and that any termination of this Agreement by Franchisee that is not in accordance with the terms of Section 6.2, or any termination of this Agreement by Afuri in accordance with its terms, may result in lost future revenue and profits to Afuri, harm to the goodwill associated with the Licensed Marks, and increased costs to Afuri to re-develop or re-franchise the market in which the Franchised Operation is located.

Accordingly, in the event that Franchisee terminates this Agreement other than in accordance with the terms of Section 6.2, or if Afuri terminates this Agreement pursuant to its terms, then Franchisee shall pay to Afuri within thirty (30) days of such termination as liquidated damages (and not as a penalty), an amount equal to the Royalty Fees you should have paid had this Agreement not been terminated, for the lesser of (1) 24 months, or (2) the number of months remaining on the term of this Agreement. Such payment will be calculated based on the average Royalty Fees you paid (or if unpaid, payable) during the 12 months immediately preceding the termination date (or shorter period if you will have operated for less than 12 months). The parties hereby acknowledge and agree that the actual damages that would be incurred by Afuri in the event of any breach or early termination of this Agreement by Franchisee would be difficult to calculate and that the liquidated damages provided for in this Agreement are fair and reasonable under the circumstances. The parties further acknowledge and agree that the liquidated damages specified in this Section are only intended to compensate Afuri for the early termination of this Agreement and Afuri's loss of royalty revenue resulting therefrom, but not for any other breach of this Agreement by Franchisee or any other damages incurred by Afuri, and all remedies applicable thereto remain available to Afuri.

Source: Item 23 — Receipts (FDD pages 50–189)

What This Means (2024 FDD)

According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, there are no payments explicitly due within seven days of termination. However, within 5 business days after termination of the agreement, the franchisee and Afuri Ramen Dumpling must agree upon a purchase price and terms for the sale of the franchisee's interest in the franchise, the franchise premises (if any), and all related equipment, fixtures, signs, real estate leases, equipment leases, and personal property. If an agreement cannot be reached within that 5-day period, a fair value and fair terms will be determined by appraisal.

Additionally, upon termination for any reason, the franchisee is obligated to return all proprietary and confidential materials to Afuri Ramen Dumpling. If the franchisee fails to return or cease the use of these items, Afuri Ramen Dumpling has the right to enter the business premises to remove and retain those items. The franchisee is responsible for paying, on demand, any expenses incurred by Afuri Ramen Dumpling in the process of removing or collecting these items or in attempting to have the franchisee cease their use.

Furthermore, if the franchisee terminates the agreement outside the terms of Section 6.2, or if Afuri Ramen Dumpling terminates the agreement according to its terms, the franchisee must pay liquidated damages to Afuri Ramen Dumpling within thirty days of termination. These damages are calculated as the royalty fees that would have been paid for either 24 months or the remaining months on the agreement, whichever is less. The calculation is based on the average royalty fees paid (or payable) during the 12 months before termination. These liquidated damages are intended to compensate Afuri Ramen Dumpling for the early termination and loss of royalty revenue, but not for any other breach or damages, for which Afuri Ramen Dumpling retains all applicable remedies.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.