What standards must a transferee meet to be approved as a new Afuri Ramen Dumpling franchisee?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
e in 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. Transferee will assume possession and control of the equipment, furnishings, signs, supplies, inventory, advance paid deposits and other personal property and fixtures located on the Franchise Premises, except as follows:
- L. Franchisee will properly operate the franchises and maintain the Franchise Premises in clean and proper working order and will continue the employment of all current employees until Transferee assumes control of the businesses and [relocates] the Franchise Premises.
- M. Franchisee will maintain a sufficient inventory and sufficient supplies on hand to provide for normal business operations through the second day after Transferee assumes control of the businesses and the Franchise Premises,
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- N. Transferee agrees to place orders with product suppliers to maintain the inventory and supply levels following the closing of this transaction.
- O.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, a transferee must meet several standards to be approved as a new franchisee. These standards relate to character, financial capacity, and experience. The transferee must also assume the current franchisee's obligations and pay a transfer fee. The current transfer fee is $30,000, which reimburses Afuri Ramen Dumpling for legal, accounting, credit check, and investigation expenses, as well as the mandatory training program for the transferee. If Afuri Ramen Dumpling obtains the transferee for the franchisee, the franchisee must pay Afuri Ramen Dumpling a 10% commission on the gross transfer price, excluding real property.
Additionally, the transferee must complete the training programs that Afuri Ramen Dumpling requires of new franchisees or otherwise demonstrate the ability to successfully operate the franchise. The transferee must also execute all documents that Afuri Ramen Dumpling requires of new franchisees. The franchise premises must be refurbished, remodeled, and have its fixtures, equipment, delivery vehicles (if applicable), and signage updated to conform to the current Operations Manual and System standards.
Furthermore, the lessor or sublessor of the Franchise Premises must consent to the assignment or sublease of the Franchise Premises to the Transferee. The Transferee's obligations to Afuri Ramen Dumpling, including the payment of all franchise fees, must take precedence over any obligations of Transferee to Franchisee. The Transferee will assume possession and control of the equipment, furnishings, signs, supplies, inventory, advance paid deposits, and other personal property and fixtures located on the Franchise Premises.