Under what conditions can Afuri Ramen Dumpling keep the entire initial franchise fee?

According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the initial franchise fee of $45,000 is generally non-refundable. This fee compensates Afuri Ramen Dumpling for various expenses and lost opportunities associated with granting the franchise. These include sales expenses, administrative overhead, return on investment, and start-up costs related to the execution of the franchise agreement and the opening of the franchise. The fee also covers Afuri Ramen Dumpling's lost or deferred opportunity to sell franchises in the designated territory to other potential franchisees.

The FDD specifies that the initial franchise fee is paid contemporaneously with the execution of the franchise agreement. This means the franchisee must pay the entire $45,000 upfront when signing the agreement. This upfront payment secures the franchisee's rights and obligations under the agreement.

However, the document indicates an exception in Section 3.1 regarding the non-refundability of the initial franchise fee. A prospective franchisee should carefully review Section 3.1 of the franchise agreement to fully understand the specific conditions under which a refund, either partial or full, might be possible. Without reviewing Section 3.1, it is unclear if there are circumstances under which Afuri Ramen Dumpling would be required to refund any portion of the initial franchise fee.