Under what conditions can either party terminate the Afuri Ramen Dumpling agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
ts terms, may result in lost future revenue and profits to Afuri, harm to the goodwill associated with the Licensed Marks, and increased costs to Afuri to re-develop or re-franchise the market in which the Franchised Operation is located.
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). The parties hereby acknowledge and agree that the actual damages that would be incurred by Afuri in the event of any breach or early termination of this Agreement by Franchisee would be difficult to calculate and that the liquidated damages provided for in this Agreement are fair and reasonable under the circumstances. The parties further acknowledge and agree that the liquidated damages specified in this Section are only intended to compensate Afuri for the early termination of this Agreement and Afuri's loss of royalty revenue resulting therefrom, but not for any other breach of this Agreement by Franchisee or any other damages incurred by Afuri, and all remedies applicable thereto remain available to Afuri.
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.
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.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
I am unable to provide the specific conditions under which either party can terminate the Afuri Ramen Dumpling agreement, according to the 2024 Franchise Disclosure Document. While Item 23 discusses termination-related financial obligations and post-termination responsibilities, it does not detail the specific events or breaches that would allow either the franchisor or franchisee to terminate the agreement.
Item 23 does mention Section 6.2 in the context of franchisee termination rights, stating that a franchisee does not have the right to terminate the agreement except as provided in Section 6.2 or as otherwise agreed in writing by both parties. This suggests that Section 6.2 contains information about the franchisee's termination rights, but the content of Section 6.2 itself is not included in the provided excerpts.
A prospective Afuri Ramen Dumpling franchisee should carefully review Section 6.2 of the Franchise Agreement to understand their rights and obligations regarding termination. They should also ask the franchisor for a comprehensive explanation of all conditions under which either party can terminate the agreement, including any specific performance standards or breaches that could lead to termination. Understanding these conditions is crucial for assessing the risks and responsibilities associated with the franchise.