Does Benihana currently plan to offer franchises for RA SUSHI or SAMURAI restaurants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
As disclosed in Item 1, certain of our subsidiaries operate restaurants offering similar goods and services under the RA SUSHI trademark. We also operate one competing business in Miami, Florida under the trademark SAMURAI®. The RA SUSHI concept offers sushi and a full menu of Pacific Rim dishes targeting a younger demographic in an environment featuring upbeat design elements. RA SUSHI restaurants may compete with BENIHANA Restaurants and with your Restaurant, may be located in your Restaurant Area, and may solicit or accept orders within your Restaurant Area. There are currently twenty RA SUSHI restaurants operating in the United States as of the date of this Disclosure Document. Neither we, nor our affiliates, currently plan to offer franchises for RA SUSHI or SAMURAI restaurants, or any other branded restaurant. However, we expressly reserve the right to do so in the future. There is no mechanism for resolving any conflicts that may arise between your BENIHANA Restaurant and franchised or company-owned RA SUSHI or SAMURAI restaurants. Any resolution of conflicts regarding location, customers, support, or services will be entirely within our business judgment.
Source: Item 12 — TERRITORY (FDD pages 47–49)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana and its affiliates do not currently plan to offer franchises for RA SUSHI or SAMURAI restaurants. However, Benihana expressly reserves the right to offer these franchises in the future. This is important for prospective Benihana franchisees to understand, as the RA SUSHI concept offers sushi and Pacific Rim dishes, targeting a younger demographic, and there are already twenty RA SUSHI restaurants operating in the United States. These restaurants may compete directly with a Benihana Restaurant, even within the franchisee's designated Restaurant Area.
Benihana also operates one competing business under the trademark SAMURAI in Miami, Florida. The FDD states that there is no formal mechanism for resolving conflicts that may arise between a Benihana Restaurant and any franchised or company-owned RA SUSHI or SAMURAI restaurants. Any conflict resolution regarding location, customers, support, or services will be entirely within Benihana's business judgment. This lack of a formal conflict resolution process could pose a risk to franchisees if competition from these other restaurant concepts were to arise.
This means that while a Benihana franchisee is granted a Restaurant Area, Benihana retains the right to operate or franchise other restaurant concepts, including RA SUSHI and SAMURAI, within that same area. This is a fairly common practice in the franchise industry, where franchisors often diversify their brand portfolio and reserve the right to explore new market segments. However, the absence of a guaranteed exclusive territory and the potential for competition from affiliated brands should be carefully considered by potential franchisees. Prospective franchisees should inquire about Benihana's long-term strategy regarding these other restaurant concepts and how they might impact the profitability of a Benihana franchise.