How can the Benihana franchise agreement be changed or modified?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
urant constructed, furnished, and equipped in accordance with this Agreement.
ARTICLE 3. COMPLIANCE WITH BENIHANA SYSTEM; BENIHANA STANDARDS
- 3.1 BNC will make the BENIHANA Standards available to Franchisee in the Operations Manual and in other forms of communications, all of which BNC may modify in its sole discretion at any time during the Franchise Term.
- 3.2 Franchisee acknowledges that Franchisee's adherence to the BENIHANA System, the BENIHANA Standards, and the provisions of the Operations Manual are reasonably necessary, and essential to BNC, to Franchisee and to other franchisees of BENIHANA Restaurants, in order to promote the goodwill associated with the BENIHANA System and the Marks. Notwithstanding that the parties acknowledge that many of the BENIHANA Standards will be inapplicable to the design, format, operation,
and products sold at the Restaurant, Franchisee shall comply with all applicable BENIHANA Standards and operate the Restaurant in accordance with the BENIHANA System as applicable to the Restaurant. SCHEDULES 1-A, 1-B, and 1-C to this Agreement will set forth modifications to the BENIHANA System as to menu, equipment, and training that the parties agree will apply to the operation of the Restaurant.
- 3.2.1 Franchisee further acknowledges that complete uniformity may not always be possible or practical throughout all BENIHANA Restaurants, and BNC may, from time to time, permit certain deviations from the BENIHANA System or the BENIHANA Standards as BNC deems appropriate in its sole discretion. The parties agree and acknowledge that the service format of the Restaurant will necessarily require certain deviations from the BENIHANA System or the BENIHANA Standards as approved by BNC in its sole discretion.
- 3.3 Franchisee shall use the Location solely for the operation of the Restaurant in strict accordance with the applicable BENIHANA Standards. The Restaurant shall be open and in operation for such minimum hours and days specified or approved by BNC in writing, which hours may be changed from time to time by BNC.
- 3.4 Franchisee must designate and retain in its employment at all times a person to serve as the "General Manager" of the Restaurant. Franchisee shall at all times otherwise staff the Restaurant with a sufficient number of employees trained in the BENIHANA System as required by BNC. The General Manager must satisfy BNC's educational and business criteria and must be individually acceptable to BNC. In addition, the General Manager must be responsible for the supervision and management of the Restaurant, and must devote full time and best efforts to this activity. The General Manager also must satisfy BNC's applicable training requirements. If the General Manager ceases to be employed by Franchisee and available to manage the Restaurant, Franchisee must promptly, and in no event more than 120 days later, designate another person as General Manager, and that person must meet all criteria for a General Manager and be acceptable and approved by BNC.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to the 2024 Benihana Franchise Disclosure Document, the Benihana system standards can be modified at any time during the franchise term at Benihana National Corp's (BNC) sole discretion. These standards are communicated through the Operations Manual and other forms of communication. Franchisees are required to adhere to these standards, as they are deemed necessary for maintaining the goodwill associated with the Benihana system and marks. However, the agreement also acknowledges that complete uniformity may not always be possible, and BNC may permit deviations from the Benihana system or standards as it deems appropriate.
In the state of Wisconsin, the franchise agreement is subject to specific amendments to comply with Wisconsin statutes and regulations. For franchises sold in Wisconsin, Benihana must provide at least 90 days' prior written notice of termination, cancellation, or substantial change in competitive circumstances, allowing the franchisee 60 days to rectify any claimed deficiency. The Wisconsin Fair Dealership Law supersedes any conflicting provisions in the agreement.
Furthermore, the Guaranty section of the franchise agreement specifies that the guarantor's liability extends to any extension, modification, or amendment to the Franchise Agreement or any other Benihana Agreements. The guarantor waives notice of such changes, and their liability is not affected by any extensions of time, credit, or waivers granted to the franchisee. This ensures that the guarantor's obligations remain in place despite any modifications to the agreement during its term.