In the event of a transfer by devise or inheritance of a Benihana franchise, how long does the personal representative have to dispose of the deceased's interest in the franchise license if the heirs or beneficiaries are disapproved by BNC?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
11.7.1 In the case of transfer by devise or inheritance, if the heirs or beneficiaries of any such person are unable to meet the conditions of ownership in this Article 11, the personal representative of the deceased person will have an additional period of up to six (6) months from the date such individual is disapproved by BNC (the "Extension Period") to dispose of the deceased's interest in the franchise license or in Franchisee.
11.7.2 Notwithstanding the foregoing, the following conditions must be met during the Transfer Period and any Extension Period: (i) the executor, administrator, or personal representative, as applicable, must provide BNC with documentation reasonably satisfactory to BNC evidencing the authority to receive an assignment or to dispose of the deceased's interest; (ii) the Restaurant remains open and operating in compliance with this Agreement; and (iii) a General Manager approved by BNC who has completed the training required by BNC is designated to operate the Restaurant during the Transfer Period or Extension Period, as applicable.
11.7.3 BNC in no way assumes any liability in connection with the legal authority of the deceased's executor, administrator, heir, beneficiary, or personal representative to receive an assignment or to dispose of the deceased's interest in the franchise license or in Franchisee.
11.7.4 If a General Manager acceptable to BNC has not been designated to operate the Restaurant during the Transfer Period or any Extension Period, BNC will have the right, at its option, to step in and itself, or through a third party designated by BNC, operate the Restaurant during such period(s).
BNC or its designee will be entitled to a reasonable fee for such services, in addition to compensation for all costs and expenses incurred in providing such services.
- 11.7.5 If the foregoing conditions are not satisfied, or if the deceased's interest is not transferred or disposed of before the expiration of the Transfer Period or Extension Period, if applicable, BNC may immediately terminate this Agreement.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, in the event of a transfer of the franchise by devise or inheritance, the personal representative of the deceased has a limited time to dispose of the interest. Specifically, if the heirs or beneficiaries are unable to meet Benihana's ownership conditions, the personal representative has an additional period of up to six months from the date of disapproval by Benihana to dispose of the deceased's interest in the franchise license. This six-month period is referred to as the "Extension Period."
However, certain conditions must be met during both the initial Transfer Period and any Extension Period. First, the executor, administrator, or personal representative must provide Benihana with satisfactory documentation proving their authority to handle the transfer. Second, the Benihana restaurant must remain open and operating in compliance with the franchise agreement. Third, a General Manager approved by Benihana, who has completed the required training, must be designated to operate the restaurant during the transfer or extension periods.
Benihana does not assume any liability regarding the legal authority of the deceased's executor, administrator, heir, beneficiary, or personal representative to manage the transfer. If an acceptable General Manager is not appointed, Benihana has the option to step in and operate the restaurant itself or through a third party, charging a reasonable fee for their services. Failure to meet these conditions or to transfer the interest within the specified periods may result in Benihana immediately terminating the franchise agreement.