Is a Benihana franchisee required to allow other Benihana franchisees to participate in and share the expense of advertising if Benihana authorizes advertising outside of the Restaurant Area?

According to Benihana's 2024 Franchise Disclosure Document, franchisees are generally not permitted to solicit customers or advertise outside of their designated Restaurant Area using specific price points or discount offerings without specific approval from Benihana. If Benihana authorizes a franchisee to advertise outside of their Restaurant Area, Benihana may require the franchisee to offer other Benihana franchisees operating in the area covered by the advertising's circulation base the opportunity to participate in and share the costs of such advertising.

This condition ensures that advertising efforts are coordinated and that other franchisees in the affected area have the chance to benefit from and contribute to the advertising campaign. This prevents a single franchisee from dominating the advertising space and potentially drawing customers away from other nearby Benihana locations.

For a prospective Benihana franchisee, this means that if they wish to engage in advertising that extends beyond their immediate territory, they may need to collaborate with other franchisees and share the expenses. This could impact their advertising budget and require them to work cooperatively with other franchisees in their region. It is important to note that this requirement is conditional and depends on Benihana's specific authorization and the scope of the proposed advertising.