Where will the arbitration take place for disputes related to the Benihana franchise agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ion, to purchase from Franchisee any or all of Franchisee's furnishings, equipment, signs, fixtures, supplies, or inventory related to the operation of the Restaurant, at a price equal to Franchisee's cost or fair market value, whichever is less.
- 14.5.1 If the parties cannot agree on a fair market value within a reasonable time, BNC will designate an independent appraiser, whose determination will be binding.
- 14.5.2 If BNC elects to exercise its purchase option under this subsection, BNC has a right to set off against the purchase price all amounts due from Franchisee and the cost of the appraisal.
- 14.6 Franchisee must comply with all obligations which by their nature survive the termination or expiration of this Agreement, including, without limitation, the covenants contained in Article 18 of this Agreement.
ARTICLE 15. DISPUTE RESOLUTION
15.1 Except as provided in Section 15.3 of this Agreement, all controversies, disputes, or claims between BNC and Franchisee, any other signatory to this Agreement, or BNC's and Franchisee's subsidiaries, affiliates, shareholders, officers, directors, agents, or employees arising out of or related to this Agreement or any other agreement between Franchisee and BNC will be
settled by arbitration administered by the American Arbitration Association ("AAA") in accordance with the AAA Rules for Commercial Disputes.
- 15.1.1 The place of arbitration will be Miami, Florida, where the award will be rendered.
- 15.1.2 The arbitration panel will consist of three members, one appointed by BNC, one appointed by Franchisee, and one chosen by the two arbitrators appointed by the parties.
- 15.1.3 The arbitrators are not authorized to award punitive or exemplary damages, and any award including such damages will not be enforceable by any court.
- 15.1.4 Franchisee and BNC agree that any arbitration will be conducted only on an individual, and not a class-wide, basis. No arbitration proceeding between Franchisee and BNC may be consolidated with any other arbitration proceeding involving BNC and any other person or entity.
- 15.1.5 Except as otherwise provided, each party will bear its own attorneys' fees, expert witness fees, and other court or arbitration costs incurred in connection with any arbitration between BNC and Franchisee.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, any disputes between Benihana National Corp. (BNC) and a franchisee will be settled through arbitration. The arbitration will be managed by the American Arbitration Association (AAA), following the AAA Rules for Commercial Disputes. The location for the arbitration proceedings will be in Miami, Florida, and the arbitration award will be rendered there.
The arbitration panel will consist of three members. Benihana will appoint one member, the franchisee will appoint another, and the two appointed arbitrators will then choose the third member. This structure ensures that both parties have a voice in the selection of the arbitration panel.
Notably, the arbitrators are not permitted to award punitive or exemplary damages, and any award that includes such damages will not be enforceable in court. Furthermore, any arbitration will be conducted on an individual basis, meaning class-wide arbitrations are not allowed, and proceedings cannot be consolidated with other arbitration cases involving Benihana and other parties. Each party is responsible for covering their own attorneys' fees, expert witness fees, and other costs related to the arbitration, unless otherwise specified. However, Benihana retains the right to seek injunctive or other extraordinary relief in any court of competent jurisdiction for specific violations, such as breaches of obligations related to proprietary rights or misuse of trademarks, which are excluded from the arbitration provision.