What sections of the Afuri Ramen Dumpling agreement survive termination or expiration?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Certain sections of this Agreement by their nature survive the expiration or termination of this Agreement, including sections pertaining to indemnification, limitation of liability, and dispute resolution.
6.7 You and Your Owners Not to Compete on Expiration, Termination or Transfer of Agreement.
6.7.1 Post-Termination Non-Compete.
This covenant will apply for two years after termination, expiration or transfer of this Agreement.
Accordingly, in the event that Franchisee terminates this Agreement other than in accordance with the terms of Section 6.2, or if Afuri terminates this Agreement pursuant to its terms, then Franchisee shall pay to Afuri within thirty (30) days of such termination as liquidated damages (and not as a penalty), an amount equal to the Royalty Fees you should have paid had this Agreement not been terminated, for the lesser of (1) 24 months, or (2) the number of months remaining on the term of this Agreement. Such payment will be calculated based on the average Royalty Fees you paid (or if unpaid, payable) during the 12 months immediately preceding the termination date (or shorter period if you will have operated for less than 12 months).
6.6 We May Assign Franchise Territory Upon Termination. Upon expiration or termination of this Agreement, we may immediately license or franchise the Franchise Territory to another person or may operate Afuri businesses within the Franchise Territory.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, certain sections of the Franchise Agreement survive its expiration or termination. These include sections pertaining to indemnification, limitation of liability, and dispute resolution. This means that even after the franchise agreement ends, the franchisee may still be responsible for certain obligations related to these areas.
Additionally, the post-termination non-compete clause outlined in section 6.7.1 remains in effect for two years after the termination, expiration, or transfer of the agreement. This prevents the franchisee (and their associated parties) from engaging in businesses that offer similar products or services to Afuri Ramen Dumpling within specific geographic areas. These areas include the Franchise Territory, a 50-mile radius around it, a 50-mile radius around any Afuri location, and throughout the United States.
Furthermore, if Afuri Ramen Dumpling terminates the agreement due to the franchisee's default, the franchisee may be required to pay liquidated damages. These damages are calculated based on the royalty fees that would have been paid for either 24 months or the remaining term of the agreement, whichever is less. This payment compensates Afuri Ramen Dumpling for the early termination and loss of royalty revenue. The franchisor may also assign the Franchise Territory to another person or operate Afuri businesses within the Franchise Territory upon expiration or termination of the agreement.