What standards must a transferee meet to acquire an Afuri Ramen Dumpling franchise?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
consideration for Franchisor's legal, accounting, credit check, training and investigation expenses incurred as a result of this transfer. [In addition, Franchisee has paid to Franchisor, contemporaneous with execution of this Agreement, a percent commission on the gross transfer price (excluding the price of real property), in the amount of $ . Franchisor acknowledges receipt of this amount in consideration for having obtained Transferee for Franchisee.]
- H. Transferee has met the standards established by Franchisor for quality of character, financial capacity and experience required of a new or renewing Afuri franchisee. Franchisee and Transferee have provided to Franchisor such information as Franchisor reasonably requested to evidence that Transferee meets these standards.
- I. The lessor or sublessor of the Franchise Premises has consented to the assignment or sublease of the Franchise Premises to Transferee.
- J. Franchisee and Transferee agree to subordinate to Transferee's obligations to Franchisor (including, without limitation, the payment of all franchise fees) any obligations of Transferee to Franchisee.
- K.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, a transferee seeking to acquire an existing franchise must meet several standards. These standards relate to the transferee's character, financial capacity, and experience, mirroring the requirements for new or renewing franchisees. The transferee must also provide any information reasonably requested by Afuri Ramen Dumpling to demonstrate that they meet these standards.
In addition to meeting the franchisor's standards, the transferee must also ensure that the lessor or sublessor of the franchise premises consents to the assignment or sublease of the premises. This indicates that securing the landlord's approval is a prerequisite for the transfer to proceed. The transferee, along with the existing franchisee, must agree to subordinate their obligations to Afuri Ramen Dumpling, including the payment of all franchise fees.
Furthermore, the existing franchisee or the transferee is responsible for submitting a transfer fee, the amount of which is not specified in the excerpt, to Afuri Ramen Dumpling upon the execution of the transfer agreement. This fee is intended to cover the franchisor's expenses related to the transfer, including legal, accounting, credit check, training, and investigation costs. In some instances, the franchisee may also pay Afuri Ramen Dumpling a commission on the gross transfer price (excluding real property), although this is contingent on Afuri Ramen Dumpling having obtained the transferee for the franchisee.
In summary, a prospective transferee must demonstrate suitable character, financial stability, and relevant experience, obtain landlord consent for premises transfer, agree to obligation subordination, and ensure the transfer fee is paid. These measures ensure that any new franchisee aligns with Afuri Ramen Dumpling's brand standards and operational requirements.