Does the Benihana agreement state that the franchisee acknowledges business risks?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ut to the public as a Japanese teppanyaki style or sushi restaurant or food service (a "Competing Business") within 150 kilometers of the Location; or
- (d) own, maintain, operate, or have any direct or indirect interest in any Competing Business which business is, or is intended to be, located within a ten (10) kilometer radius of any BENIHANA Restaurant, or any other restaurant which is owned, operated, or franchised by BNC, Benihana of Tokyo, Benihana, Inc., or any Affiliated Company.
- 18.6 Franchisee understands and acknowledges that BNC has the right, in its sole discretion, to reduce the scope of any covenant set forth in Section 18.5, or any portion thereof, without Franchisee's consent, effective immediately upon Franchisee's receipt of written notice thereof; and Franchisee agrees that it will comply forthwith with any covenant as so modified.
- 18.7 Franchisee acknowledges and agrees that any failure to comply with the covenants and agreements in this Article 18, or with the covenants and agreements in Article 6 with respect to the Marks, will result in irreparable injury to BNC for which no adequate remedy at law may be available, and, therefore, BNC will be entitled, in addition to any other remedies BNC may have at law or in equity, to obtain specific performance of, or an injunction against the violation of, the requirements of this Article 18 and such requirements of Article 6, without showing actual or threatened damage and without the necessity of posting bond.
- 18.7.1 Franchisee agrees to pay all court costs and reasonable attorney's fees incurred by BNC in obtaining specific performance of, or an injunction against violation of, the requirements of this Article 18 or Article 6.
- 18.8 Franchisee expressly agrees that no claim Franchisee may have or assert against BNC, whether or not arising from this Agreement, will constitute a defense to the enforcement by BNC of the covenants in this Article 18.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
Based on the 2024 Benihana Franchise Disclosure Document, the franchisee acknowledges specific business risks and responsibilities related to non-compliance and competition.
The Benihana franchise agreement states that if the franchisee fails to comply with the covenants and agreements, particularly those in Article 18 regarding competition and Article 6 concerning the brand's trademarks, Benihana National Corp (BNC) will suffer irreparable injury. Because of this, BNC is entitled to seek specific performance or an injunction against the franchisee, without needing to demonstrate actual damage or post a bond. The franchisee is also responsible for covering all court costs and reasonable attorney's fees incurred by Benihana in enforcing these requirements.
Furthermore, the franchisee acknowledges that the geographical and term restrictions outlined in Section 18.5 of the agreement are fair and reasonable. These restrictions are deemed necessary to protect the goodwill associated with the Benihana brand and other business interests of BNC. The franchisee also agrees that adhering to these covenants will not cause undue financial hardship and will not impair their ability to secure suitable employment or income. The franchisee recognizes that using their special knowledge of the Benihana business in competition with BNC or its franchisees would cause significant harm to Benihana and its franchisees.