Does the Benihana franchisee acknowledge that the business venture involves business risks?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
-lived assets | | 1,513 | | 1,345 |
Note 14 – Commitments and Contingencies
The Company is party to claims in lawsuits incidental to its business, including lease disputes and employee-related matters. The Company has recorded accruals in its consolidated financial statements in accordance with ASC 450, Contingencies. While the resolution of a lawsuit, proceeding or claim may have an impact on the Company's financial results for the period in which it is resolved, in the opinion of management, the ultimate outcome of such matters and judgements in which the Company is currently involved, either individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position or results of operations.
EXHIBIT F TO BENIHANA NATIONAL CORP. FRANCHISE DISCLOSURE DOCUMENT
STATEMENT OF PROSPECTIVE FRANCHISEE
[TO BE COMPLETED BY ALL FRANCHISEES & GUARANTORS BEFORE SIGNING FRANCHISE AGREEMENT OR ANY EXHIBITS TO THE FRANCHISE AGREEMENT]
As you know, you and Benihana National Corp. ("BNC") are preparing to enter into a Franchise Agreement for the establishment and operation of a BENIHANA® Restaurant. The purpose of this Questionnaire is to determine whether any statements or promises were made to you by any BNC employee or representative that BNC has not authorized and that may be untrue, inaccurate, or misleading. Please review each of the following questions carefully and provide honest and complete responses to each question. The answers you provide in this Questionnaire are material to BNC, and BNC is relying on all such answers in agreeing to enter into a franchise relationship with you.
| 1. Have you received and personally reviewed the BNC Franchise Disclosure Document ("FDD"), including all Exhibits attached to the FDD?
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, prospective franchisees must complete a questionnaire to confirm they haven't received any unauthorized, misleading promises from Benihana employees or representatives. Benihana emphasizes that the franchisee's answers in this questionnaire are critical to their decision to grant a franchise. This indicates that Benihana wants to ensure franchisees understand the realities and potential risks of the business.
Furthermore, the document includes a section titled "Commitments and Contingencies," which acknowledges that Benihana is involved in lawsuits incidental to its business. While Benihana believes these legal matters will not have a materially adverse effect on the company's financial position, it highlights the inherent risks and potential for legal challenges in the restaurant business.
Additionally, Benihana disclaims any warranty regarding the quality of services provided by architects or contractors referred to the franchisee. Benihana is not responsible for construction delays or losses resulting from restaurant design or construction issues, as they have no control over landlords or potential construction-related problems. This reinforces the understanding that franchisees bear the responsibility and risk associated with these aspects of establishing their Benihana restaurant.