Under the Afuri Ramen Dumpling franchise agreement, what actions constitute a 'transfer' by the franchisee?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section in Franchise Agreement (“FA”) | Summary |
|---|---|---|
| k. “Transfer” by franchisee – defined | FA Section 7.1 | Restrictions apply if you sell, transfer, assign, encumber, give, lease, or sublease (collectively called “transfer”) the whole or any part of the franchise agreement, substantial assets of the franchise, or ownership or control of you. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 40–45)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, a 'transfer' by the franchisee encompasses a range of actions with specific restrictions. These actions include selling, transferring, assigning, encumbering, giving, leasing, or subleasing the whole or any part of the franchise agreement.
Furthermore, the definition of 'transfer' extends to the substantial assets of the franchise. This means that if a franchisee attempts to transfer a significant portion of the business's assets, it will be considered a transfer under the franchise agreement and subject to the associated restrictions.
Finally, the definition includes the transfer of ownership or control of the franchisee's business entity. Essentially, any change in who owns or controls the franchise is considered a transfer, triggering the franchisor's rights and requiring adherence to the transfer provisions outlined in the agreement. These restrictions are detailed in Section 7.1 of the Franchise Agreement.