Does Afuri Ramen Dumpling have the right to use its marks for any purpose at any location?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
We retain all rights not specifically granted to you in the Franchise Agreement. This includes our right to use or license the use of our Marks or any other marks to anyone, and for any purpose, and at any location (except that we will not place an Afuri restaurant within your Franchise Territory). Neither we nor our affiliates are restricted from participating in other distribution methods, whether or not within your Franchise Territory, (1) under the Marks, or (2) under marks and product or service configurations different than those offered through your Franchise. For example, we may place present and future Afuri products for sale in grocery stores and food markets at any location, whether or not within the Franchise Territory or within close proximity to your Afuri Franchise. Other distribution methods may also include internet sales, telephone sales, catalogue sales, sales via online marketplaces (such as Goldbelly.com, for example), and sales by other means. We will have no obligation to compensate you for any such sales made within your Franchise Territory.
We may place Afuri establishments in airport and mall food courts, stadiums, and similar limited access environments in your Franchise Territory and regardless of the location of other Afuri operations. We will have no obligation to compensate you for any such sales made within your Franchise Territory.
Source: Item 12 — Territory (FDD pages 34–37)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the company retains all rights not specifically granted to the franchisee in the Franchise Agreement. This explicitly includes the right to use or license its marks to anyone, for any purpose, and at any location. However, Afuri Ramen Dumpling will not place an Afuri restaurant within the franchisee's designated Franchise Territory. This means that while a franchisee is granted a specific territory, Afuri Ramen Dumpling maintains broad control over its brand and can utilize it in various ways outside of directly competing with the franchisee within their territory.
Afuri Ramen Dumpling's rights extend to other distribution methods, such as placing products in grocery stores, food markets, and through online sales channels like Goldbelly.com, regardless of whether these locations are within a franchisee's territory. The company is not obligated to compensate franchisees for any sales made through these alternative channels within their Franchise Territory. Additionally, Afuri Ramen Dumpling may establish locations in non-traditional venues like airport and mall food courts and stadiums, even within a franchisee's territory, without any obligation to compensate the franchisee.
This arrangement is fairly common in franchising, where franchisors seek to maximize brand exposure and revenue streams through diverse channels. However, it's crucial for prospective Afuri Ramen Dumpling franchisees to understand that their territory is protected only from direct competition by another Afuri Ramen Dumpling restaurant. They will likely face competition from other channels and should assess the potential impact on their business. Franchisees should inquire about Afuri Ramen Dumpling's plans for alternative distribution methods in their market to better gauge potential competition and revenue impacts.