What must a Benihana franchisee cease to use after termination or expiration of the Franchise Agreement regarding the Benihana system?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
14.1 Upon termination or expiration of this Agreement for any reason, all rights granted under this Agreement to Franchisee shall immediately terminate, and Franchisee shall strictly comply with the following obligations:
(a) Franchisee shall immediately cease to operate the Restaurant.
(b) Franchisee shall immediately and permanently cease to use in any manner the Marks, including, without limitation, the service marks "BENIHANA", "Benihana of Tokyo" and the "flower" symbol, or any confusingly similar trademark, service mark, trade name or insignia.
(c) Franchisee shall not thereafter directly or indirectly identify itself in any manner as a franchisee of the BENIHANA System or former BNC licensee or franchisee.
(d) Franchisee shall immediately and permanently cease to use in any manner whatsoever, any Confidential Information, the BENIHANA System, and any of BNC's methods, procedures and techniques associated with the BENIHANA System; the BENIHANA trade dress and distinctive forms, slogans, signs, symbols and devices associated with the BENIHANA System.
Without limiting the generality of the foregoing, Franchisee shall cease to use all fixtures, displays, decorations, stationery, forms, advertising materials and other articles used in connection with Franchisee's operation of the Restaurant.
- (e) Franchisee shall immediately make or cause to be made such modifications and alterations to the Location and the Restaurant to distinguish the appearance of the Location and Restaurant from other BENIHANA Restaurants and shall make such specific additional changes thereto as BNC may request for that purpose.
If Franchisee fails or refuses to comply with the requirements of this Section 14.1 (e), in addition to any other rights BNC has under this Agreement, BNC shall have the right to enter upon the premises where the Restaurant was operated, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at Franchisee's expense, which expense Franchisee agrees to pay upon demand.
- (f) Franchisee shall take all actions necessary to cancel any assumed names or equivalent registrations containing any of the Marks.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, a franchisee must immediately cease several activities related to the Benihana system. This includes discontinuing operation of the restaurant and permanently stopping the use of Benihana's trademarks, service marks like "BENIHANA" and "Benihana of Tokyo", the flower symbol, or any confusingly similar names or insignia.
Furthermore, the franchisee cannot directly or indirectly identify themselves as a current or former Benihana franchisee. They must also immediately and permanently stop using any confidential information, the Benihana system itself, and any of Benihana's associated methods, procedures, techniques, trade dress, forms, slogans, signs, symbols, and devices. This extends to ceasing the use of all fixtures, displays, decorations, stationery, forms, advertising materials, and other items used in the restaurant's operation.
Additionally, the franchisee is required to modify the location and restaurant to differentiate its appearance from other Benihana restaurants, making specific changes requested by Benihana for this purpose. If the franchisee fails to comply with these modifications, Benihana has the right to enter the premises and make the necessary changes at the franchisee's expense. The franchisee must also cancel any assumed names or equivalent registrations that contain any of Benihana's marks.
These stipulations are typical in franchise agreements to protect the brand's identity and prevent confusion among consumers after a franchise relationship ends. The financial burden of altering the restaurant's appearance and the potential loss of business due to the inability to operate under the Benihana name are significant considerations for prospective franchisees.