Does the Benihana franchise agreement grant rights to operate Benihana Restaurants at locations other than the specified Location?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
rance, and customer service that are a critical part of the BENIHANA System, and Franchisee acknowledges the necessity of operating the BENIHANA Restaurant franchised under this Agreement in conformity with the BENIHANA System, including the BENIHANA Standards.
- G. Franchisee seeks a license to use the Marks and the BENIHANA System in connection with the operation of a BENIHANA Restaurant at a single location specified in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1. GRANT OF FRANCHISE AND FRANCHISE TERM
- 1.1 The INTRODUCTION paragraphs set forth above are hereby incorporated in this Article 1 by reference as if set forth fully herein.
- 1.2 BNC grants to Franchisee, and Franchisee accepts, a non-exclusive franchise license to operate a single BENIHANA Restaurant (the "Restaurant") at the specific location approved by BNC and identified in the Contract Data Sheet attached as Exhibit A hereto (the "Location"), using the Marks and the BENIHANA System in accordance with the BENIHANA Standards and the terms of this Agreement.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the franchise agreement grants franchisees the right to operate a Benihana Restaurant only at the specific location approved by Benihana, which is identified in the Contract Data Sheet. The franchise license is non-exclusive, and any geographic limitations on Benihana's rights to use or license the marks relate solely to the operation of a Benihana Restaurant at the designated location.
This means that a franchisee's rights are limited to the single, approved location. The agreement does not grant, nor imply the grant of, any rights regarding other Benihana Restaurants at other locations. The franchisee cannot use, license, sublicense, or franchise others to use the Benihana marks or system outside of their specific location. They also do not receive any options, rights of first refusal, or development opportunities for additional locations under the agreement.
This single-unit structure is typical in the franchise industry, especially for restaurant concepts requiring significant investment and operational expertise. Benihana retains the right to expand its brand through other franchisees or company-owned stores in different locations, even if those locations might compete with an existing franchisee's restaurant. This is a standard practice that allows the franchisor to control brand growth and market coverage.