Does a Benihana franchisee have the right to bind or obligate BNC, Benihana, Inc., or Benihana of Tokyo in any way?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 16. INDEPENDENT CONTRACTOR
- 16.1 Franchisee acknowledges and agrees that it is an independent contractor and is not an agent, partner, joint venturer, joint employer, or employee of BNC or any affiliate of BNC, and no fiduciary relationship exists between the parties. Franchisee shall be the sole and exclusive employer of its employees with the sole right to hire, discipline, discharge and establish wages, hours benefits, employment policies, and other terms and conditions of employment for it employees without consultation or approval from BNC. BNC shall have no control over the terms and conditions of employment of Franchisee's employees. Franchisee shall have no right to bind or obligate BNC, Benihana, Inc., or Benihana of Tokyo in any way nor shall it represent that it has any right to do so.
- 16.2 In all public records and in Franchisee's relationships with other persons, on stationery, business forms and checks, Franchisee shall indicate independent ownership of the Restaurant and that it operates under a franchise granted by BNC.
- 16.3 Franchisee shall exhibit at the Restaurant, in such places as may be designated by BNC, a notification that the Restaurant is operated as an independent contractor and not by BNC, Benihana, Inc. or
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee is explicitly prohibited from binding or obligating BNC, Benihana, Inc., or Benihana of Tokyo in any way. The franchise agreement specifies that the franchisee operates as an independent contractor and not as an agent, partner, or employee of Benihana. This distinction is crucial as it clarifies that the franchisee has no authority to act on behalf of the franchisor.
This independence extends to employment matters, as the franchisee has sole control over their employees, including hiring, firing, and setting employment terms, without needing approval from Benihana. This reinforces the franchisee's separate legal and operational status.
The FDD also requires the franchisee to indicate independent ownership of the restaurant in all public records, business forms, and relationships with other persons. Furthermore, the franchisee must display a notification at the restaurant stating that it is operated as an independent contractor and not by Benihana, Benihana, Inc., or Benihana of Tokyo. These measures ensure that customers and other parties understand that the franchisee is a separate entity responsible for its own actions and obligations.