What other diseases, besides viruses, could severely affect Benihana's business?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
uture. We incurred COVID-19 related costs of $5.8 million and $5.5 million in 2021 and 2020, respectively.
Health concerns arising from outbreaks of flu viruses or other diseases, or regional or global health pandemic could severely affect our business.
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses, such as coronavirus, norovirus, Avian Flu or "SARS," and H1N1 or "swine flu," or other diseases such as bovine spongiform encephalopathy, commonly known as "mad cow disease." If a virus is transmitted by human contact, our employees or customers may become infected, or may choose, or be advised, to avoid gathering in public places, any of which may adversely affect the guest traffic at our restaurants an
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, several diseases other than viruses could negatively impact its business. Specifically, the FDD mentions bovine spongiform encephalopathy, commonly known as "mad cow disease." This disease, along with concerns about avian flu, could reduce the demand for beef and poultry products, which are key components of Benihana's menu.
If customers become concerned about consuming beef due to outbreaks like mad cow disease, or poultry due to avian flu, Benihana's sales of related menu items could decline significantly. The document states that the inability to serve beef or poultry would restrict the variety of menu items Benihana can offer. This could lead to a loss of customers who prefer those items, and Benihana might struggle to attract new customers with an altered menu.
Benihana also acknowledges that food-borne illnesses in general, even if not directly traced to their restaurants, could reduce demand for their menu offerings. The FDD highlights specific food safety issues like hepatitis A, listeria, salmonella, and e-coli as potential threats that could damage the brand's reputation and affect customer choices. Publicity related to product contamination or recalls could further deter customers.
These health and safety concerns have significant implications for a prospective Benihana franchisee. Maintaining strict food safety standards and protecting the food supply are critical to avoid food-borne illnesses and maintain customer trust. Franchisees must be prepared to manage potential supply chain disruptions and adapt their menus if certain ingredients become unavailable or if customer preferences shift due to health concerns. Failure to do so could result in restaurant closures, legal liabilities, and long-term damage to the Benihana brand.