What is the cure period for a Benihana franchisee's failure to pay suppliers for equipment purchases or leases related to the Restaurant?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
- (f) Franchisee defaults in the performance of any term, condition, or obligation of payment of any indebtedness to Franchisee's suppliers or others arising out of the purchase or lease of equipment in connection with the Restaurant.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee defaults on payments to suppliers or lessors for equipment related to the restaurant, they have a cure period of five days. This cure period begins after Benihana provides notice of the default and follows the expiration of any other period outlined in the relevant provision.
This means that if a Benihana franchisee fails to pay their suppliers for equipment, Benihana will notify them of the default. The franchisee then has five days to rectify the situation and make the outstanding payment. This relatively short cure period underscores the importance of maintaining good relationships with suppliers and managing finances effectively to avoid disruptions to the restaurant's operations.
It is important to note that the cure period is triggered only after Benihana provides notice, and it runs concurrently with any other cure periods specified in the agreement. Franchisees should be aware of this requirement and ensure they have systems in place to monitor and manage their payment obligations to suppliers to avoid defaulting on their franchise agreement.