What is the requirement for an Afuri Ramen Dumpling franchisee to do business from a location other than the Franchise Premises?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
1.2 One Location for Franchise. You will operate the Franchise only at the Franchise Premises. If not determined when this Agreement is executed, you are responsible for selecting the site for the Franchise Premises within the search area ("Search Area") outlined in Exhibit 1 and in accordance with this Agreement.
1.1.4 Co-Branding. Some Afuri franchises may be placed at a location where another, separate business is operated under another business name. If the Franchise Premises is at that type of location, it will be deemed "co-branded" for the purposes of this Agreement. If the Franchise Premises is located in a co-branded location, the exact basis and calculation of Revenue will follow the requirements and procedures we outline in the Operations Manual. If the Franchise Premises is in a co-branded location, you will obtain and keep, or make arrangements for us to have access to, a complete and accurate set of books and records of the operation of all businesses operated at and all business done through the cobranded location, although Revenue will be limited to Afuri related receipts. If the Franchise Premises is located in a co-branded location, we may enter upon the Franchise Premises at reasonable times to interview co-branded partners and to inspect and copy any books, records and documents related to the co-branded location in order to verify your compliance with the terms of the Franchise Agreement. The Operations Manual may contain additional information about co-branded locations.
1 Afuri Franchise Agreement: Exhibit 4 2. Exceptions to In-Term and Post-Term Non-Competition Covenants. Franchisee (or its owners or affiliated entities) may continue to operate the Pre-Existing Business(es) [Alternative #1: only at the locations indicated above][ Alternative #2: including any new or additional locations under the same brand name(s) and offering the same goods and services as the Pre-Existing Business(es)] notwithstanding the in-term and post-term non-competition covenants in the Franchise Agreement (in Sections 5.7.2 and 6.7 of the Franchise Agreement, respectively). However, the confidentiality and nondisclosure covenants of the Franchise Agreement are not affected by this Addendum and remain in full force and effect.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, franchisees are generally required to operate their franchise solely at the designated Franchise Premises. The FDD stipulates that the franchisee is responsible for selecting a site within a defined search area, ensuring it complies with Afuri Ramen Dumpling's requirements.
However, there is an exception for "co-branded" locations, where an Afuri Ramen Dumpling franchise operates within a location that also houses another separate business under a different name. In such cases, the franchisee must maintain complete and accurate records for all businesses operating at the co-branded location, and allow Afuri Ramen Dumpling access to these records for compliance verification, even though revenue calculation is limited to Afuri-related receipts.
Additionally, the document outlines a scenario where a franchisee may continue to operate a pre-existing business, even if it conflicts with non-competition covenants in the Franchise Agreement. This is addressed through an addendum that allows the franchisee (or its owners/affiliated entities) to continue operating the pre-existing business, potentially including new or additional locations under the same brand, offering similar goods and services. However, the confidentiality and nondisclosure covenants of the Franchise Agreement remain in effect.