When must a Benihana franchisee deliver a written statement of Gross Sales to BNC?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ributions actually owed to BNC (once Franchisee's actual Gross Sales have been determined), Franchisee must pay, and BNC is authorized to debit Franchisee's account for, the balance due. If the Royalty and Advertising Contributions debited are more than the Royalty and Advertising Contributions actually owed to BNC (once Franchisee's actual Gross Sales have been determined), BNC will credit the excess amount debited against the amount BNC otherwise would debit from Franchisee's account during the following month.
- 7.9 Any payment not received by BNC when due under this Agreement will bear interest from the due date until payment at a rate of interest (calculated on a daily basis based upon a 365-day year) equal to the lesser of 18% per annum or the maximum allowed by law (as of the date of non-payment).
ARTICLE 8. BOOKS, RECORDS, AND REPORTS
- 8.1 Franchisee must, on the fifteenth (15th) day of each month (or the next business day if the fifteenth day is Saturday, Sunday, or holiday), deliver to BNC a written statement of Gross Sales for the preceding calendar month ("Gross Sales Statement"). The Gross Sales Statement must be certified as accurate by Franchisee, a financial officer of Franchisee, or Franchisee's principal accountant responsible for overseeing the Restaurant's books and records.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee must deliver a written statement of Gross Sales for the preceding calendar month to Benihana on the fifteenth (15th) day of each month. If the 15th falls on a Saturday, Sunday, or holiday, the statement is due on the next business day. This statement, referred to as the "Gross Sales Statement," must be certified as accurate by the franchisee, a financial officer of the franchisee, or the franchisee's principal accountant responsible for overseeing the restaurant's books and records.
This requirement ensures that Benihana receives timely and accurate financial information from its franchisees, which is essential for calculating royalties, advertising contributions, and overall financial performance. Franchisees must maintain meticulous records and establish a system for preparing and submitting these statements by the specified deadline each month. Failing to submit the Gross Sales Statement can result in financial penalties.
Specifically, if a franchisee fails to send the Gross Sales Statement in any month, Benihana is entitled to debit the franchisee's business operating account for 120% of the most recent Royalty and Advertising Contributions paid. This penalty underscores the importance of adhering to the reporting schedule and provides an incentive for franchisees to comply with the requirement. Benihana will credit any excess amount debited against the amount Benihana otherwise would debit from Franchisee's account during the following month.