What is the Assignor required to do to ensure the effectiveness of the assignment of telephone numbers to BNC for Benihana?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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- The conditional agreement will become effective, at BNC's option, automatically upon termination or expiration of the Franchise Agreement entered into by and between Assignor and BNC for the operation of the Restaurant. Upon the occurrence of either condition, Assignor must do all things required by the telephone company to assure the effectiveness of the assignment of telephone numbers as if the BNC had been originally issued such telephones, telephone numbers, telephone listings and the usage thereof.
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- Assignor agrees to pay the listing company on or before the effective date of assignment all amounts owed for the use of the Franchisee's Listings, including, without limitation, Yellow Pages advertising. Assignor further agrees to indemnify BNC for any sums BNC must pay any listing company to effectuate this Assignment and agrees to fully cooperate with the listing companies and BNC in effectuating this Assignment.
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- Without limiting the generality of the foregoing, Assignor agrees and acknowledges that as between BNC and Assignor, upon termination or expiration of the Franchise Agreement, BNC will have the sole right to and interest in the Franchisee's Listings, and Assignor appoint BNC as its true and lawful attorney-in-fact to direct the listing agencies to assign the same to BNC, and execute such documents and take such actions as may be necessary to effectuate the assignment. Upon such event, Assignor will immediately notify the listing agencies to assign the Listings to BNC; Assignor also agrees not to utilize any call forwarding messages referring to another number. If Assignor fails to promptly direct the listing agencies to assign the Franchisee Listings to BNC, BNC will direct the listing agencies to effectuate the assignment contemplated under this Agreement, to BNC.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION LIST OF OUTLETS (FDD pages 67–72)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the Assignor (typically the franchisee in this context) has specific obligations to ensure the smooth transfer of telephone numbers and related listings to Benihana National Corp (BNC) upon termination or expiration of the franchise agreement. This conditional agreement becomes effective automatically at BNC's discretion when the Franchise Agreement ends.
Specifically, the Assignor must take all actions required by the telephone company to ensure the assignment of telephone numbers is as effective as if BNC had originally been issued those numbers, listings, and usage rights. This includes paying all outstanding amounts owed to the listing company for the use of franchisee listings, including Yellow Pages advertising, before the effective date of the assignment. The Assignor also agrees to indemnify BNC for any costs BNC incurs to effectuate this assignment and must fully cooperate with both the listing companies and BNC during the process.
Furthermore, the Assignor acknowledges that BNC has the sole right and interest in the franchisee's listings upon termination or expiration of the Franchise Agreement. The Assignor appoints BNC as their attorney-in-fact to direct listing agencies to assign the listings to BNC and to execute necessary documents. The Assignor must immediately notify listing agencies to assign the listings to BNC and must not use call forwarding to another number. If the Assignor fails to promptly direct the listing agencies, BNC has the right to direct the listing agencies to effectuate the assignment.
This ensures that Benihana maintains control over its branding and customer communication channels, preventing a former franchisee from diverting customers or creating confusion after the franchise agreement ends. For a prospective franchisee, this highlights the importance of understanding the terms of the franchise agreement regarding intellectual property and customer relationships, particularly concerning the transfer of assets like telephone numbers upon termination or expiration.