Does Afuri Ramen Dumpling have the right to create or modify advertising regions?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
2.5.1 Establishment of Advertising Programs. At any time, we will have the right to create or modify advertising regions for the purpose of establishing regional advertising, marketing, and promotional programs. We will promptly notify you and our other franchisees, of the establishment, modification, and geographical boundaries of regional advertising regions. We may require all franchisees located within each geographic region to meet periodically for the purpose of creating and establishing regional advertising programs. Each franchise unit, and each unit we own and operate, will be entitled to one vote at these meetings. For the purpose of this subsection, each unit we own will be deemed to be a franchise.
If at any meeting of the franchisees in an advertising region, 75% of the franchisees vote to contribute to a regional advertising program, all franchisees within that region will be obligated to make a contribution to a regional advertising fund in the amount established by the vote (the "Regional Advertising Fund"). No advertising region may require any franchisee in that region to make a contribution to a Regional Advertising Fund in excess of 2% of that franchisee's Revenue (as defined in Section 2.6).
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, Afuri Ramen Dumpling retains the right to establish or modify advertising regions for regional advertising, marketing, and promotional programs. Afuri Ramen Dumpling will notify franchisees of any establishment, modification, and geographical boundaries of these regions.
Afuri Ramen Dumpling may require franchisees within a geographic region to meet periodically to establish regional advertising programs. Each franchise unit, including those owned and operated by Afuri Ramen Dumpling, has one vote at these meetings, with company-owned units considered as franchises for voting purposes.
If 75% of the franchisees in an advertising region vote to contribute to a regional advertising program, all franchisees within that region are obligated to contribute to a Regional Advertising Fund. The contribution cannot exceed 2% of the franchisee's Revenue, as defined in Section 2.6 of the Franchise Agreement. This means that while Afuri Ramen Dumpling can create these regions, the franchisees have a say in whether or not they will contribute to regional advertising efforts, although a majority vote can compel participation.
This structure allows Afuri Ramen Dumpling to implement regional advertising strategies while also giving franchisees a voice in the financial commitments required for such programs. Prospective franchisees should consider the potential financial impact of mandatory contributions to a Regional Advertising Fund when evaluating the franchise opportunity.