Sushi Avenue Franchise

Financing Details

SAH Holdings does not offer direct or indirect financing to franchisees, except at its discretion to assist with operations. SAH Holdings provides the location for the franchise, covering rent, build-out, and utilities. At its discretion, SAH Holdings or its affiliate, Sushi Avenue, may offer financing for several components: * Loan Advances: Available for up to three months after commencing operations, ranging from $1,000 to $2,500. Franchisees must have been operating for at least 60 days with sales of at least $2,500 per week. These advances carry no interest. * Initial Food Inventory and Point of Sale Materials Purchase: Up to $20,000 per Sushi Bar, for a term of 2-6 months, with no interest. * Initial Equipment & Smallwares: Up to $20,000, for a term of 2-6 months, with no interest. * Franchise Fee or Purchase Price of an Existing Sushi Bar: Up to 100% of the purchase price, for a term of 2-6 months, with no interest. All financing is at SAH Holdings' sole discretion. Franchisees may be required to sign a promissory note, which must be personally co-signed or guaranteed by all shareholders or members. Payments are due monthly. If a franchisee defaults on any loaned, advanced, or deferred amounts, the obligations under the promissory note may be accelerated, declared due in full, and subject to an 8% annual interest rate, potentially leading to franchise termination. SAH Holdings or its affiliate has the right to withhold any amounts owed from the franchisee's Franchise Commissions. Any negative balance remaining after deductions is considered indebtedness payable on demand.

Litigation Summary

SAH Holdings has disclosed four litigation cases, all involving its indirect predecessor, Sushi Avenue, Incorporated. The first case, Assurance Company of America v. Sushi Avenue, Incorporated, was a civil action filed in 2015 regarding alleged breach of contract and unjust enrichment related to insurance. Sushi Avenue, Incorporated, in turn, alleged breach of contract. The parties reached a confidential settlement in June 2016, and the claims were dismissed without costs. The second case, Michael Khing and MKS Sushi Inc. v. Nay Lin, Nay Hla, and Sushi Avenue Incorporated, was a civil action filed in 2014, with plaintiffs alleging breach of contract and unjust enrichment. Sushi Avenue, Incorporated counter-sued for breach of contract, tortious interference, and non-compete violations. This case was confidentially settled and dismissed in December 2015. The third civil action, Peerless Indemnity Insurance Company v. Sushi Avenue, Inc., filed in 2015, involved allegations of breach of contract concerning additional insurance premiums. Sushi Avenue, Inc. disputed the amounts owed. A confidential settlement was reached, and the case was dismissed. The most recent case is an administrative proceeding filed by the Washington Securities Division in 2015, In the Matter of Determining Whether there has been a violation of the Franchise Investment Protection Act of Washington by Sushi Avenue, Incorporated. The division alleged that Sushi Avenue, Incorporated violated the Washington Franchise Investment Protection Act between 2016 and 2024 by entering into 14 franchise agreements without providing disclosure documents or being registered. On July 1, 2024, Sushi Avenue, Incorporated entered into a Consent Order, agreeing to cease and desist from violations and pay $2,000 in investigative costs.

Renewal Conditions

To renew, SAH Holdings franchisees must meet several conditions: They must pay a renewal fee up to 50% of the then-current Franchise Fee and provide written notice of their intent to renew at least six months before the current term expires. Franchisees are required to renovate and modernize their Sushi Bar to align with current System standards and consistent with the host Store's policies, which may involve signs, furnishings, equipment, fixtures, and decor. They must be in full compliance with all agreements with SAH Holdings and its affiliates, having no outstanding defaults and having satisfied all monetary obligations. Additionally, franchisees need to retain the right to occupy the Sushi Bar premises for the renewal term, execute SAH Holdings' then-current form of franchise agreement (which may include different or increased terms like a higher royalty fee or advertising contribution), and sign a general release of claims against SAH Holdings. Finally, they must comply with any current qualification and training requirements. All Sushi Bars and Remote Store Sites under the agreement must be renewed simultaneously, and failure to renew any will be considered a failure to renew all. SAH Holdings retains the discretion to waive any or all obligations to pay a renewal fee.

Staffing Notes

SAH Holdings requires that each Sushi Bar always has at least one fully trained manager on duty who is ServSafe certified. Franchisees must maintain a competent, conscientious, and trained staff in sufficient numbers for efficient and effective operation. SAH Holdings imposes no limitations on who franchisees hire as managers but expects compliance with all applicable laws and protection of brand goodwill. If the Principal Operating Officer or Partner lacks sushi chef experience, they must have additional training. Employees are required to wear uniforms or designated clothes of specific color and design, as determined by the Store or SAH Holdings, and present a neat and clean appearance, providing competent and courteous service.