What is the fee for Benihana to evaluate a product or supplier that has not been previously approved?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| NAME OF FEE | AMOUNT | DUE DATE | REMARKS |
|---|---|---|---|
| Agreement, we have the right to pay them for you and you must reimburse us for the cost of the insurance purchased plus a 5% administrative fee. | |||
| Termination Fee | Aggregate royalties paid during your three fiscal years immediately before the termination date, plus all damages, costs and expenses, including reasonable attorneys’ fees | Date of termination | If the Franchise Agreement is terminated as a result of any default under the Franchise Agreement. |
| Inspection & Testing | Cost of inspection and cost of test | On demand | If you request us to evaluate a product or supplier that we have not previously approved, you must pay us an inspection fee of $350 plus the costs of shipping the proposed product sample to us. |
Source: Item 6 — OTHER FEES (FDD pages 18–21)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee requests that Benihana evaluate a product or supplier not already approved, the franchisee must pay an inspection fee. This fee covers both the cost of the inspection itself and the expenses associated with shipping a sample of the product to Benihana for evaluation. The inspection fee is $350, in addition to the shipping costs for the product sample. This fee is due on demand.
This policy ensures that Benihana maintains control over the quality and consistency of products used within its franchise system. By requiring franchisees to seek approval for new products and suppliers, Benihana can ensure that all locations meet its standards. The franchisee bears the cost of this evaluation, which includes a fixed inspection fee plus variable shipping costs.
For a prospective Benihana franchisee, this means that introducing a new, unapproved product or supplier will incur an upfront cost. The $350 inspection fee, along with shipping expenses, should be factored into the franchisee's budget when considering alternative suppliers or products. This fee is in addition to any potential costs associated with sourcing and procuring the sample product itself. Franchisees should weigh the potential benefits of using a new supplier or product against these evaluation costs.
It is important for franchisees to understand this policy and budget accordingly if they plan to deviate from Benihana's approved supplier list. This process helps protect the Benihana brand and ensures that all products meet the franchisor's standards, but it also places a financial responsibility on the franchisee to cover the costs of evaluation.