How far in advance of the Benihana Franchise Term expiration must a franchisee submit a written application for a Successor Franchise Agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) Franchisee shall have submitted a written application to BNC for a Successor Franchise Agreement at least three hundred and sixty-five (365) days prior to the expiration of the Franchise Term and shall have executed and returned to BNC for final approval and execution a Successor Franchise Agreement at least thirty (30) days prior to the expiration of the Franchise Term.
Any Successor Franchise Agreement issued to Franchisee shall be the then-current form of Franchise Agreement being offered to franchisees as of the date of the expiration of the Franchise Term.
The Successor Franchise Agreement may contain provisions, terms and conditions substantially different from those contained herein, including without limitation, different or increased Royalties, Advertising Contributions, operating standards, training or equipment requirements, duration or renewal terms;
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee must submit a written application for a Successor Franchise Agreement at least 365 days before the expiration of the current Franchise Term. Additionally, the franchisee must execute and return the Successor Franchise Agreement to Benihana for final approval and execution at least 30 days before the expiration of the current term.
Meeting these deadlines is crucial for a Benihana franchisee who wishes to continue operating their restaurant under a new franchise agreement. Failure to submit the application or return the executed agreement within the specified timeframes could jeopardize their opportunity to renew the franchise.
It's important to note that the Successor Franchise Agreement may contain terms and conditions that differ significantly from the original agreement. These changes could include, but are not limited to, adjustments to royalties, advertising contributions, operating standards, training or equipment requirements, and the duration or renewal terms of the agreement. Therefore, franchisees should carefully review the terms of the Successor Franchise Agreement to understand their obligations and the financial implications of renewing their franchise with Benihana.
In addition to the timely submission of the application and agreement, the franchisee must also meet other conditions to be eligible for a Successor Franchise Agreement. These conditions include not being in default of any obligations under the current agreement, remodeling the restaurant to reflect Benihana's current image, meeting Benihana's legal, financial, and operational standards for new franchisees, providing all requested information and documentation, paying an administrative fee, and executing a general release of claims against Benihana.