What is the reasonable license fee that Afuri Ramen Dumpling charges to license a supplier?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Subject to your obligation to purchase goods and services from certain exclusively designated suppliers, with advance written notice you may request our approval to obtain products, equipment, supplies or materials from sources that we have not previously approved. We may require you to give us sufficient information, photographs, drawings, samples, and other data to allow us to determine whether the items from these other sources meet our specifications and standards, as established from time to time. These specifications and standards will relate to quality, taste, durability, value, cleanliness, texture, composition, strength, finish and appearance, and the suppliers' capacity and facility to supply your needs in the quantities, at the times, and with the reliability necessary for efficient operation. We may require that samples from any supplier be delivered to a designated independent testing laboratory for testing before approval and use. You will reimburse us for the actual cost of the tests. We will license any supplier that can meet or exceed our quality control requirements and standards, for a reasonable license fee, to produce and deliver products to you but to no other person. Our confidential recipes, ingredients, requirements, designs, systems and formulas will be revealed to potential suppliers only after we have received reasonable evidence that the proposed supplier is trustworthy and reputable; has the capacity to consistently follow our standards, requirements and testing procedures; will maintain the confidentiality of the designs, systems, formulas, ingredients and recipes; and will adequately supply your reasonable needs. We will not unreasonably withhold approval of a supplier you propose (unless we have previously designated a single supplier or exclusive suppliers for certain products or services). We will endeavor in good faith to notify you in writing of the approval or disapproval of any supplier you propose within 30 days of our receipt from you of your written notice of request for approval.
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, the company will license any supplier that meets or exceeds their quality control requirements and standards, for a reasonable license fee, to produce and deliver products to franchisees but to no other person. The confidential recipes, ingredients, requirements, designs, systems and formulas will be revealed to potential suppliers only after Afuri Ramen Dumpling has received reasonable evidence that the proposed supplier is trustworthy and reputable; has the capacity to consistently follow their standards, requirements and testing procedures; will maintain the confidentiality of the designs, systems, formulas, ingredients and recipes; and will adequately supply your reasonable needs.
This means that if a franchisee finds a supplier that can meet Afuri Ramen Dumpling's standards, the supplier can be approved to provide products to that franchisee and potentially others in the system. However, the exact amount of the "reasonable license fee" is not specified in the FDD.
Prospective franchisees should inquire with Afuri Ramen Dumpling about the specific criteria and costs associated with becoming an approved supplier. This information is crucial for understanding the potential for franchisees to influence the supply chain and manage costs, as well as the process for ensuring quality and compliance within the Afuri Ramen Dumpling system.