What is Benihana entitled to if a franchisee fails to comply with the non-compete covenants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.6 Franchisee acknowledges and agrees that any failure to comply with the covenants and agreements in this Article 18, or with the covenants and agreements in Article 6 hereof with respect to the Marks, shall result in irreparable injury to BNC for which no adequate remedy at law may be available, and, therefore, BNC shall be entitled, in addition to any other remedies which it may have hereunder, at law or in equity, to obtain specific performance of, or an injunction against the violation of, the requirements of this Article 18 and such requirements of Article 6, without the necessity of showing actual or threatened damage and without the necessity of posting bond.
Franchisee agrees to pay all court costs and reasonable attorney's fees incurred by BNC in obtaining specific performance of, or an injunction against violation of, the requirements of this Article 18 or Article 6.
- 18.7 Franchisee expressly agrees that the existence of any claim which it may have against BNC, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by BNC of
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee fails to comply with the non-compete covenants outlined in Article 18 or the trademark covenants in Article 6, Benihana is entitled to specific performance or an injunction against the violation of these requirements. This means Benihana can seek a court order to compel the franchisee to comply with the non-compete terms or to stop the franchisee from violating them.
Benihana does not need to demonstrate actual or threatened damage to obtain this specific performance or injunction, and they are not required to post a bond. This provision strengthens Benihana's ability to enforce the non-compete agreements, as it lowers the bar for obtaining injunctive relief.
Furthermore, the franchisee is responsible for covering all court costs and reasonable attorney's fees incurred by Benihana in pursuing specific performance or an injunction. This financial responsibility serves as a deterrent against violating the non-compete covenants, as the franchisee would have to bear the legal expenses associated with Benihana's enforcement efforts. The existence of any claim the franchisee may have against Benihana does not serve as a defense to Benihana enforcing the covenants.