What conditions must a new owner of a Minority Ownership Interest meet to be approved by Benihana?

According to Benihana's 2024 Franchise Disclosure Document, a new owner of a Minority Ownership Interest must meet several conditions to gain approval from Benihana. These conditions ensure that the new owner is suitable and will uphold the obligations of the franchise agreement.

First, the new owner must be of good moral character and reputation, reflecting Benihana's interest in maintaining a positive brand image. Second, the new owner must meet Benihana's then-current criteria for minority owners, which may include regulatory requirements imposed on Benihana by governmental authorities. This ensures compliance with all applicable laws and regulations.

Additionally, the new owner is required to execute and deliver a written agreement to Benihana, assuming all obligations of the seller of the Minority Ownership Interest. This legally binds the new owner to the existing franchise agreement. Finally, the new owner must sign a personal guaranty of the Franchisee's obligations, as required by Benihana at its discretion, providing an additional layer of financial security for Benihana. If any of these conditions are not met to Benihana's satisfaction, Benihana retains the right to refuse consent to the disposition of the Minority Ownership Interest, giving Benihana significant control over who becomes a minority owner.