factual

Where will the arbitration take place for a Benihana franchise dispute?

Benihana Franchise · 2024 FDD

Answer from 2024 FDD Document

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.
  • 15.2 BNC and Franchisee agree that this Agreement evidences a transaction involving interstate commerce and that the enforcement of this arbitration provision and the confirmation of any award issued to either party by reason of an arbitration conducted pursuant to this arbitration provision is governed by the United States Federal Arbitration Act, codified at 9 U.S.C. § 1, et seq. (the "FAA"). The parties also agree that any such award is eligible for and subject to confirmation by a court in accordance with applicable law and procedure.
  • 15.3 Any other provision of this Agreement notwithstanding, the following claims and matters expressly are excluded from the coverage of the arbitration provision in Section 15.1 of this Agreement:
  • 15.3.1 Injunctive or Extraordinary Remedies. Notwithstanding the provisions of Section 15.1 above, BNC may bring an action in any court of competent jurisdiction for injunctive or other extraordinary relief, as BNC deems necessary or appropriate: (i) prohibiting violations of Franchisee's obligations under Article 6 and Article 18 of this Agreement; (ii) prohibiting the use or display of the Marks; or (iii) compelling Franchisee to take steps reasonably necessary to preserve BNC's reputation, goodwill and proprietary rights, including removal of any displays of the Marks or otherwise distinguishing any business at the Location from a BENIHANA

Source: Item 23 — Receipts (FDD pages 74–576)

What This Means (2024 FDD)

According to Benihana's 2024 Franchise Disclosure Document, any disputes requiring arbitration will take place in Miami, Florida. The arbitration will be managed by the American Arbitration Association (AAA) and follow the AAA Rules for Commercial Disputes.

The arbitration panel will consist of three members. Benihana National Corp. (BNC) will appoint one member, the franchisee will appoint another, and the two appointed arbitrators will choose the third. This structure ensures representation from both parties in the dispute.

Notably, the arbitrators are not allowed to award punitive or exemplary damages, and any award that includes such damages will not be legally enforceable. Both Benihana and the franchisee agree that any arbitration will be conducted on an individual basis, meaning no class-wide actions are permitted. Each party is responsible for covering their own legal fees, expert witness fees, and other costs related to the arbitration, unless otherwise specified.

Benihana may seek injunctive or other extraordinary relief in a court of law for specific violations, such as breaches of obligations related to operating standards, unauthorized use of trademarks, or actions needed to protect Benihana's reputation and proprietary rights. This exception allows Benihana to quickly address critical issues that could cause immediate harm to the brand.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.