What is the cure period for a Benihana franchisee who unintentionally files an inaccurate Gross Sales Statement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) Franchisee fails to submit any Gross Sales Statement or other financial report required under this Agreement, or unintentionally files an inaccurate Gross Sales Statement or other financial report required under this Agreement.
The cure period for an act of default under this provision is thirty (30) days after notice by BNC as provided herein.
- (i) Franchisee knowingly submits any false Gross Sales Statement or other financial report required under this Agreement.
There shall be no cure period for an act of default under this provision.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee who unintentionally files an inaccurate Gross Sales Statement has a cure period of thirty days after receiving notice from Benihana National Corp (BNC). This means that if a franchisee makes an error in their financial reporting, they have 30 days to correct the mistake after Benihana informs them of the issue.
However, it's important to note the distinction between unintentionally and knowingly submitting a false Gross Sales Statement. If a Benihana franchisee knowingly submits a false statement, there is no cure period, and the agreement can be terminated immediately. This highlights the importance of accuracy and honesty in financial reporting to maintain a good standing with the franchisor.
This cure period allows franchisees time to rectify unintentional errors, which is a fairly standard practice in franchising. Franchise agreements often include cure periods to allow franchisees to correct certain defaults before the agreement is terminated. This specific clause provides a reasonable timeframe for Benihana franchisees to address and resolve any unintentional inaccuracies in their financial reporting, ensuring compliance and maintaining a positive relationship with Benihana.