Is a Benihana franchisee required to use the proprietary information contained in the Benihana Manual and received during training?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
You do not receive the right to use any item covered by a patent or copyright, but you must use the proprietary information contained in our Manual and that you receive in training. The Manual and the specifics on your use of the Manual are described in the Franchise Agreement. Although we are in the process of filing applications and have filed applications for copyright registration, we claim copyright protection for the Manual, software, and other materials we give you for your use or for public dissemination, other proprietary information and publications we own or have acquired under license from a third party, and everything concerning operating procedures. All of this is our proprietary intellectual property.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 55–57)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees are required to use the proprietary information contained in the Benihana Manual and received during training. While franchisees do not receive rights to any patented or copyrighted items, they must utilize the proprietary information provided in the Manual and during training programs. The Franchise Agreement further details the specifics of using the Manual. Benihana also claims copyright protection for the Manual, software, operating procedures and other materials provided to franchisees. All of these items are considered Benihana's proprietary intellectual property.
Benihana also discloses confidential or proprietary information and trade secrets to its franchisees. Franchisees are only allowed to use this information to operate their Benihana restaurant, and with Benihana's approval. During the term of the Franchise Agreement, and even after it expires or terminates, franchisees cannot directly or indirectly use this information for their own benefit, or share it with others. The only exception is that franchisees can share necessary confidential information with their employees to operate the business, but only while the Franchise Agreement is active. All information that Benihana designates as secret or confidential is considered secret and confidential for the Franchise Agreement.
Franchisees must ensure that all personnel with access to confidential information maintain its confidentiality. Benihana may require franchisees to have their personnel sign agreements that specifically identify Benihana as a third-party beneficiary with the right to enforce the covenants. Franchisees are also required to promptly inform Benihana of any unauthorized use of confidential or proprietary information. While Benihana is not obligated to take action, it will respond to notifications of unauthorized use as it deems appropriate. This underscores the importance of safeguarding Benihana's proprietary information and the potential legal ramifications of its misuse or unauthorized disclosure.