What is the franchisee's obligation regarding the Benihana Standards when operating a Benihana Restaurant?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Operations Manual and in other forms of communications, all of which BNC may modify in its sole discretion at any time during the Franchise Term.
- 3.2 Franchisee acknowledges that Franchisee's adherence to the BENIHANA System, the BENIHANA Standards, and the provisions of the Operations Manual are reasonably necessary, and essential to BNC, to Franchisee and to other franchisees of BENIHANA Restaurants, in order to promote the goodwill associated with the BENIHANA System and the Marks. Notwithstanding that the parties acknowledge that many of the BENIHANA Standards will be inapplicable to the design, format, operation,
and products sold at the Restaurant, Franchisee shall comply with all applicable BENIHANA Standards and operate the Restaurant in accordance with the BENIHANA System as applicable to the Restaurant. SCHEDULES 1-A, 1-B, and 1-C to this Agreement will set forth modifications to the BENIHANA System as to menu, equipment, and training that the parties agree will apply to the operation of the Restaurant.
- 3.2.1 Franchisee further acknowledges that complete uniformity may not always be possible or practical throughout all BENIHANA Restaurants, and BNC may, from time to time, permit certain deviations from the BENIHANA System or the BENIHANA Standards as BNC deems appropriate in its sole discretion. The parties agree and acknowledge that the service format of the Restaurant will necessarily require certain deviations from the BENIHANA System or the BENIHANA Standards as approved by BNC in its sole discretion.
- 3.3 Franchisee shall use the Location solely for the operation of the Restaurant in strict accordance with the applicable BENIHANA Standards. The Restaurant shall be open and in operation for such minimum hours and days specified or approved by BNC in writing, which hours may be changed from time to time by BNC.
- 3.4 Franchisee must designate and retain in its employment at all times a person to serve as the "General Manager" of the Restaurant. Franchisee shall at all times otherwise staff the Restaurant with a sufficient number of employees trained in the BENIHANA System as required by BNC. The General Manager must satisfy BNC's educational and business criteria and must be individually acceptable to BNC. In addition, the General Manager must be responsible for the supervision and management of the Restaurant, and must devote full time and best efforts to this activity. The General Manager also must satisfy BNC's applicable training requirements.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees must adhere to the Benihana System and Benihana Standards, as these are considered reasonably necessary and essential to promote the goodwill associated with the Benihana system and marks. These standards are provided in the Operations Manual and other communications, which Benihana may modify at its discretion during the franchise term. Franchisees must operate their restaurant in strict accordance with the applicable Benihana Standards and the Benihana System.
While the document acknowledges that some Benihana Standards may not apply to the restaurant's design, format, operation, and products, franchisees are still required to comply with all applicable standards. The document also notes that complete uniformity may not always be possible across all Benihana restaurants, and Benihana may permit deviations from the system or standards at its discretion. The service format of the restaurant may also necessitate certain deviations from the Benihana System or Standards, as approved by Benihana.
Furthermore, franchisees must use the location solely for operating the restaurant in strict accordance with the applicable Benihana Standards. Compliance with local, state, and federal laws is also a requirement of compliance with the Benihana Standards and the Benihana System. Franchisees are obligated to provide Benihana with all reports from governmental agencies related to the restaurant within five business days of receipt. This includes reports of inspections by health departments or any agency with regulatory oversight. Franchisees must also comply with Payment Card Industry Data Security Standards Requirements (PCI DSS) and any other data-related requirements specified by Benihana during the franchise term.