Does Afuri Ramen Dumpling have the right to approve all transfers of the franchise by a franchisee?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement ("FA") | Summary |
|---|---|---|
| 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. |
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, Afuri Ramen Dumpling retains the right to approve all franchise transfers. This means that if a franchisee wishes to sell, assign, or otherwise transfer their franchise to a new owner, Afuri Ramen Dumpling must grant its approval before the transfer can proceed. This provision is detailed in Section 7.1 of the Franchise Agreement.
Several conditions must be met for Afuri Ramen Dumpling to approve a transfer. The potential new franchisee must meet Afuri Ramen Dumpling's qualifications for franchisees, agree to take on all of the existing franchisee's obligations, and successfully complete the mandatory training program. Additionally, the current franchisee must not be in default of the agreement, must release Afuri Ramen Dumpling from any liabilities, and either the current franchisee or the new franchisee must pay a transfer fee.
Afuri Ramen Dumpling also has the right of first refusal to purchase the franchise business if a franchisee receives an offer from a third party. This means that before a franchisee can sell to someone else, they must offer Afuri Ramen Dumpling the opportunity to buy the business on the same terms. Afuri Ramen Dumpling has 30 days to decide whether to exercise this right. This level of control is common in franchising, allowing franchisors to maintain brand standards and ensure that new operators are well-qualified.