Does a Benihana franchisee have any ownership interest in the Benihana Marks or the goodwill associated with them?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.2 Franchisee acknowledges that the Marks are valid and subsisting and that Franchisee had no part in the creation or development of the Marks.
Franchisee disclaims any and all right, title, or ownership interest in the Marks or the goodwill associated with them.
Any goodwill arising from Franchisee's use of the Marks will inure solely and exclusively to the owner of the Marks, and Franchisee specifically acknowledges and agrees that, upon expiration or termination of this Agreement, Franchisee has no goodwill associated with its prior uses of the Marks or the BENIHANA System.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee does not acquire any ownership interest in the Benihana Marks or the goodwill associated with them. Noodle Time, Inc., a wholly-owned subsidiary of BNC, owns all rights and interests in the Marks. BNC is the exclusive licensee of the Marks with the right to sublicense them.
The FDD states that the franchisee acknowledges the validity of the Marks and disclaims any right, title, or ownership interest in them or the associated goodwill. Any goodwill that arises from the franchisee's use of the Marks will exclusively benefit the owner of the Marks. Upon the expiration or termination of the Franchise Agreement, the franchisee acknowledges that they have no goodwill associated with their prior use of the Marks or the Benihana system.
This is a standard clause in most franchise agreements. It ensures that the franchisor retains control over its brand and that the brand's value is not diluted by individual franchisees. This provision protects Benihana's brand identity and ensures consistent quality and customer experience across all franchise locations. It also allows Benihana to maintain the value of its trademarks and goodwill, which are critical assets for the franchise system.