Who can certify the accuracy of the Gross Sales Statement for a Benihana franchise?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (a) a profit and loss statement and POS sales reports for each month during the Franchise Term, due within thirty (30) days after the end of each month;
- (b) within ninety (90) days following the end of each fiscal year during the Franchise Term, an unaudited financial statement for the preceding fiscal year with such detail and in a format as specified by BNC, together with a certificate executed by Franchisee certifying that such financial statement
is true and accurate;
- (c) copies of Franchisee's operating reports submitted to Franchisee's landlord if required under Franchisee's lease, simultaneously with Franchisee's submission of such reports to Franchisee's landlord;
- (d) copies of Franchisee's state and federal income tax returns and state sales tax returns;
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the franchisee is responsible for certifying the accuracy of financial statements. Specifically, within ninety (90) days following the end of each fiscal year, the franchisee must submit an unaudited financial statement for the preceding fiscal year. This statement must be detailed and in a format specified by Benihana.
Along with this financial statement, the franchisee must provide a certificate confirming that the information provided is true and accurate. This certificate needs to be signed by the franchisee. This requirement ensures that Benihana receives reliable financial data from its franchisees.
Benihana also requires franchisees to maintain full, complete, and accurate books of account and records related to Gross Sales and the operation of the restaurant. These records must be retained for at least five (5) years from the date of their preparation. If there is an audit, review, inspection, or controversy regarding royalties, these records must be kept until the issue is resolved. This rigorous record-keeping and certification process helps Benihana monitor the financial performance of its franchises and ensures compliance with the franchise agreement.