What is the cure period for a Benihana franchisee if a final judgment remains unsatisfied?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.2.5 A final judgment against Franchisee remains unsatisfied of record for thirty (30) days or longer (unless a supersedeas or other appeal bond is filed), execution is levied against Franchisee's business or property at the Location, or a suit to foreclose any lien or mortgage against the Restaurant premises or any furniture, fixtures, or equipment at the Restaurant is filed against Franchisee and not dismissed within thirty (30) days.
The cure period for an act of default under this provision is five (5) days after notice by BNC following expiration of any other period set forth in the provision.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a final judgment against a franchisee remains unsatisfied for 30 days or longer, Benihana will provide a 5-day cure period. This cure period begins after Benihana gives notice to the franchisee, following the initial 30-day period during which the judgment remains unsatisfied. However, this is only applicable if a supersedeas or other appeal bond is not filed.
In practical terms, this means that if a court issues a judgment against a Benihana franchisee, the franchisee has 30 days to satisfy the judgment. If the franchisee fails to do so and does not file an appeal bond, Benihana can then issue a notice of default. After this notice, the franchisee has only 5 days to resolve the unsatisfied judgment.
Failure to address the judgment within this 5-day cure period could lead to termination of the franchise agreement. This highlights the importance of franchisees managing their financial and legal obligations to avoid potential default and termination of their Benihana franchise.