Can the Benihana Franchise Agreement be terminated if the franchisee violates any Anti-Terrorism Laws?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
21.6 Franchisee shall comply with and assist BNC to the fullest extent possible in BNC's efforts to comply with the Anti-Terrorism Laws (as defined below). Franchisee shall not hire nor have any dealings with any person listed on the SDN List, as it may be modified from time to time. Franchisee is solely responsible specifically acknowledges and agrees that Franchisee's indemnification obligations under this Agreement pertain to Franchisee's obligations under this Section 21.6. Any misrepresentation by Franchisee under this Section 21.6, or any violation of any Anti-Terrorism Laws by Franchisee, Franchisee's owners, principals or employees, shall constitute grounds for immediate termination of this Agreement and any other agreement Franchisee has entered into with BNC or its affiliates. As used herein, "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the Franchise Agreement can be terminated immediately if the franchisee, their owners, principals, or employees violate any Anti-Terrorism Laws. Benihana requires franchisees to comply fully with all Anti-Terrorism Laws and assist Benihana in their compliance efforts. Franchisees are prohibited from hiring or dealing with any person listed on the SDN (Specially Designated Nationals) List, which is updated periodically.
The term "Anti-Terrorism Laws" includes Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, the Cuban Assets Control Regulations, the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Furthermore, the franchisee is solely responsible for and specifically acknowledges that their indemnification obligations under the Agreement pertain to their obligations under Section 21.6, which addresses compliance with Anti-Terrorism Laws. Any misrepresentation by the franchisee under this section also constitutes grounds for immediate termination. This clause highlights the critical importance Benihana places on adhering to anti-terrorism regulations and the severe consequences for failing to do so.