What constitutes a failure to commence design, construction, equipping and process of opening a Benihana Restaurant with due diligence?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ve the right to require Franchisee to cause to be made all alterations or
modifications that BNC deems necessary.
- 2.6 Both parties understand and acknowledge that the Restaurant will operate with a limited amount of equipment as compared to a standard-format full-service BENIHANA Restaurant. BNC will consult with Franchisee, to the extent BNC deems necessary, on the construction and equipping of the Restaurant, but it shall be and remain Franchisee's sole responsibility to diligently design, construct, equip, and otherwise ready and open the Restaurant. Franchisee will be responsible for obtaining all zoning classifications, permits, clearances, certificates of occupancy and center clearances, which may be required by governmental authorities.
- 2.7 Franchisee shall use licensed general contractors, designers, and architects in performing construction work at the Restaurant, and will comply with all requirements under a lease for the Restaurant.
- 2.8 BNC expressly disclaims any warranty of the quality or merchantability of any goods or services provided by architects, contractors or any other persons or entities to which it may refer Franchisee. BNC is not responsible for delays in the construction, equipping or decoration of the Restaurant or for any loss resulting from the Restaurant design or construction, because BNC has no control over the landlord or the numerous design, construction, or relate problems that could occur and delay the opening of the Restaurant.
- 2.9 BNC shall have access to the Restaurant while work is in progress and may require such reasonable alterations or modifications of the construction that BNC deems necessary.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee must commence operation of the Restaurant within twelve (12) months from the date of the Franchise Agreement. Operation is deemed to have commenced when the Restaurant, constructed, furnished, and equipped according to the agreement, opens to the public.
Benihana requires franchisees to diligently design, construct, equip, and prepare the Restaurant for opening. The franchisee is solely responsible for obtaining all necessary zoning classifications, permits, clearances, certificates of occupancy, and center clearances from governmental authorities. Franchisees must use licensed general contractors, designers, and architects for construction work and comply with all lease requirements.
Benihana personnel will be available to consult with the franchisee during the planning, design, construction, and build-out phases, typically at Benihana's offices in Miami, Florida, unless otherwise agreed. Benihana also retains the right to access the Restaurant during construction and may require reasonable alterations or modifications. The franchisee cannot open the Restaurant without Benihana's written authorization, confirming that all requirements have been met.
Failure to meet these obligations and open the Restaurant within the stipulated timeframe would constitute a failure to commence operations with due diligence, potentially leading to breach of contract and other repercussions as defined in the Franchise Agreement.