Does Benihana authorize its employees or representatives to make financial performance representations orally?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
As you know, you and Benihana National Corp. ("BNC") are preparing to enter into a Franchise Agreement for the establishment and operation of a BENIHANA® Restaurant. The purpose of this Questionnaire is to determine whether any statements or promises were made to you by any BNC employee or representative that BNC has not authorized and that may be untrue, inaccurate, or misleading. Please review each of the following questions carefully and provide honest and complete responses to each question. The answers you provide in this Questionnaire are material to BNC, and BNC is relying on all such answers in agreeing to enter into a franchise relationship with you.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 66–67)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, prospective franchisees are required to complete a questionnaire to determine if any unauthorized statements or promises were made by Benihana employees or representatives. This questionnaire is designed to identify any untrue, inaccurate, or misleading information that may have been provided. Benihana emphasizes that the answers provided in this questionnaire are material and that the company relies on these answers when deciding to enter into a franchise relationship. This suggests that Benihana does not authorize its employees or representatives to make financial performance representations orally.
The questionnaire includes specific questions to ascertain whether any employee or person speaking on behalf of Benihana made any statements, promises, agreements, or assurances concerning the franchisee's ability to obtain inventory. It also clarifies that Benihana's approval of a location or financing plan does not constitute any assurance, representation, or warranty of successful operation or profitability. These disclaimers are intended to prevent franchisees from relying on any unauthorized or overly optimistic representations made during the franchise sales process.
This approach is typical in franchising, where franchisors aim to control the information provided to potential franchisees to avoid future disputes. By requiring a signed statement from the franchisee acknowledging that they have not relied on any unauthorized representations, Benihana seeks to protect itself from potential legal claims based on misleading or inaccurate information. Prospective franchisees should carefully consider these disclaimers and rely only on the information provided in the Franchise Disclosure Document and any written agreements with Benihana.