Can Afuri Ramen Dumpling unreasonably withhold consent for a transfer?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
substantial assets of the Franchise business, or ownership or control of you or to fractionalize any of the rights granted to you pursuant to this Agreement. Any attempted transfer without our prior written consent will be a breach of this Agreement. Our consent will not be unreasonably withheld. We need not consent to any transfer before the date the Franchise opens for business.
- 7.1.2 Because we will have a strong and vested interest in the financial viability and ongoing management abilities of the transferee, we need not consent to any transfer if we reasonably believe the purchase price is excessive or if we believe based upon a review of the transferee's operational and business plans that the transferee's business operations might not be beneficial on a cash flow or financial basis.
- 7.1.3 We need not consent to any transfer to a competitor of ours.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the franchisor's consent to a transfer of the franchise agreement will not be unreasonably withheld. However, Afuri Ramen Dumpling does not have to consent to any transfer before the franchise opens for business.
Afuri Ramen Dumpling also need not consent to a transfer if they reasonably believe the purchase price is excessive, or if the transferee's operational and business plans suggest the business operations might not be beneficial on a cash flow or financial basis. Additionally, Afuri Ramen Dumpling does not have to consent to any transfer to a competitor.
These stipulations are fairly standard in franchising. The franchisor wants to ensure that any new franchisee is financially stable and capable of running the business successfully, and that a transfer does not put the Afuri Ramen Dumpling brand at risk. The FDD also states that consent to a proposed transfer will not be a waiver of any claims Afuri Ramen Dumpling may have against the franchisee, nor a waiver of their right to demand exact compliance with the agreement. Consent to one transfer does not constitute consent for any future transfers.