Is a Benihana franchisee required to maintain builders' risk insurance during any remodeling of the restaurant?

According to Benihana's 2024 Franchise Disclosure Document, franchisees are required to maintain builders' risk insurance during any remodeling of the restaurant. This insurance must be on a completed value non-reporting basis.

This requirement ensures that Benihana restaurants are adequately protected against potential losses or damages that may occur during remodeling. Builders' risk insurance typically covers property damage, theft, and vandalism, providing financial protection for the franchisee.

Failure to maintain the required insurance, including builders' risk insurance during remodeling, constitutes a breach of the franchise agreement. Benihana has the right to purchase the insurance if the franchisee fails to do so, and the franchisee must reimburse Benihana for 105% of the cost, covering both the insurance premium and administrative expenses.