After the Benihana franchise term expires or terminates, for how long is the franchisee prohibited from employing individuals employed by Benihana or its affiliates?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
18.4 Franchisee covenants that, during the Franchise Term and for a period of two (2) years after the expiration or termination hereof, Franchisee shall not, directly or indirectly:
(b) employ or seek to employ any person (or induce such person to leave his or her employment) who is, or has within the one (1) year prior to any such expiration or termination been, employed by BNC, any of its affiliates, including, without limitation the "Haru," or "RA" Restaurants ("Affiliated Company"), or any other franchisee operating under the BENIHANA System;
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee is restricted from employing or attempting to employ any person who is or has been employed by Benihana, its affiliates, or other Benihana franchisees within one year prior to the expiration or termination of the franchise agreement. This restriction applies for a period of two years following the expiration or termination of the franchise term.
This provision prevents a former franchisee from poaching employees who have knowledge of Benihana's operational systems, trade secrets, and customer relationships. By enforcing this non-employment clause, Benihana aims to protect its brand, maintain consistency across its franchise network, and prevent unfair competition from former franchisees.
For a prospective Benihana franchisee, this means that upon the end of their franchise agreement, they cannot hire anyone who has worked for Benihana or its related entities within the past year. This could potentially limit their access to experienced staff familiar with the Benihana system if they choose to start a similar business after their franchise agreement concludes. Franchisees should factor this restriction into their long-term business plans and staffing strategies.
It is important to note that this restriction applies to employees of Benihana, its affiliates (including "Haru" or "RA" Restaurants), and other Benihana franchisees. The franchisee is also prohibited from inducing such persons to leave their employment. This comprehensive restriction is designed to safeguard Benihana's interests and maintain the integrity of its franchise system.