Can Afuri Ramen Dumpling refuse to renew a franchise on terms generally available to other franchisees?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.1.1 Renewal Franchise Agreement. If you are not in breach, you may renew the Franchise for periods of 10 years under the terms of our then-current Franchise Agreement forms. "Then-current," as used in this Agreement and applied to our Franchise Disclosure Document and Area Development Addendum will mean the form then currently provided to prospective franchisees or area developers, or if not then being provided, then the form we select in our sole discretion which previously has been delivered to and executed by a franchisee of ours (with appropriate modifications to reflect the fact that the agreement relates to the grant of a renewal franchise). These forms may vary materially from this Agreement. Royalty Fees, Advertising Fees, and other fees will be set at the then prevailing rates and terms. Your failure or refusal to execute the renewal Franchise Agreement forms within 30 days after delivery to you may be regarded as an election by you not to renew. Upon renewal, the Franchise Territory may be modified and its geographic area may be reduced or expanded to meet our then-current franchise market penetration and demographic standards.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, a franchisee may renew their franchise agreement for additional 10-year terms if they are not in breach of the existing agreement. The renewal will be under the terms of Afuri Ramen Dumpling's then-current Franchise Agreement forms, which may differ materially from the original agreement. These then-current forms apply to prospective franchisees or area developers, or if not then being provided, then the form Afuri Ramen Dumpling selects in its sole discretion which previously has been delivered to and executed by a franchisee.
The Royalty Fees, Advertising Fees, and other fees will be set at the then prevailing rates and terms. The franchisee's failure or refusal to execute the renewal Franchise Agreement forms within 30 days after delivery may be regarded as an election by the franchisee not to renew.
Upon renewal, the Franchise Territory may be modified, and its geographic area may be reduced or expanded to meet Afuri Ramen Dumpling's then-current franchise market penetration and demographic standards. This indicates that while renewal is possible if the franchisee is not in breach, Afuri Ramen Dumpling retains considerable discretion in setting the terms of the renewal agreement, including fees and territory, based on their prevailing standards at the time of renewal.