Does the Benihana franchisee have indemnification obligations related to their obligations under Section 21.6?
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, Benihana franchisees have specific indemnification obligations related to Section 21.6 of the franchise agreement. Section 21.6 requires franchisees to comply with and assist Benihana in complying with Anti-Terrorism Laws.
The franchisee is responsible for ensuring they do not hire or conduct business with individuals or entities listed on the SDN (Specially Designated Nationals) List. The franchise agreement explicitly states that the franchisee's indemnification obligations pertain to their responsibilities under Section 21.6.
Any misrepresentation or violation of Anti-Terrorism Laws by the franchisee, its owners, principals, or employees, constitutes grounds for immediate termination of the franchise agreement and any other agreements with Benihana or its affiliates. This highlights the importance of franchisees adhering to these laws and regulations to avoid potential legal and financial repercussions, including the loss of their franchise.