Does Afuri Ramen Dumpling have any restrictions on its right to transfer the franchise agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
to | | | | this Item. |
| Provision | Section in Franchise Agreement ("FA") | Summary |
|---|---|---|
| i. Franchisee's obligations on termination or nonrenewal. | FA Section 6.5 & 6.8 | De-identification, return of manuals, release of phone numbers and listings, de identification of your franchise equipment and premises, payment of sums owed, confidentiality, and non competition. |
| j. Assignment of contract by | FA Section 7.1 | There are no restrictions on our |
| franchisor | right to transfer. | |
| k. "Transfer" by franchisee – defined | FA Section 7.1 | Restrictions apply if you sell, transfer, assign, encumber, give, lease, or sublease (collectively called "transfer") the whole or any part of the franchise agreement, substantial assets of the franchise, or ownership or control of you. |
| l. Franchisor's approval of | FA Section 7.1 | We have the right to approve all |
| transfer by franchisee | transfers. | |
| m. Conditions for franchisor approval of transfer | FA Section 7.1 | The transferee must qualify as a franchisee, assume your obligations, and successfully pay for and complete the mandatory training. You may not be in default, must release us, and you or the transferee must pay the Transfer Fee. |
| n. Franchisor's right of first refusal to acquire franchisee's business | FA Section 7.3 | If you receive an offer, we will have the right to purchase on the same terms and conditions as offered to you, 30-day notice and right to decide. |
| o. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 40–45)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company faces no restrictions on its right to transfer the franchise agreement. This is in contrast to the franchisee, whose ability to transfer is subject to certain conditions and approvals.
Specifically, the franchisee needs to secure Afuri Ramen Dumpling's approval for any transfer. This includes scenarios where the franchisee sells, assigns, encumbers, gives, leases, or subleases any part of the franchise agreement, substantial assets of the franchise, or ownership/control of the franchise.
To gain approval from Afuri Ramen Dumpling, the proposed transferee must meet the franchisor's qualifications for a new franchisee. The transferee must also formally assume all of the existing franchisee's obligations under the franchise agreement. Furthermore, the transferee must successfully complete the mandatory training program and pay the associated transfer fee. The franchisee must not be in default of the agreement and must release Afuri Ramen Dumpling from any claims.
Afuri Ramen Dumpling also retains the right of first refusal, allowing them to purchase the franchise on the same terms and conditions as any offer the franchisee receives from a third party. Additionally, Afuri Ramen Dumpling has the option to purchase the franchise before the franchisee solicits offers from other potential buyers.