factual

What is the Franchisee's responsibility in operating the Benihana Restaurant?

Benihana Franchise · 2024 FDD

Answer from 2024 FDD Document

nchisee, without BNC's prior written consent, from subleasing or assigning any of Franchisee's occupancy rights or renewing or otherwise extending the lease term;

  • (d) a provision giving BNC the right to enter the premises to make modifications necessary to protect the Marks or the BENIHANA System or to cure any default under this Agreement;
  • (e) a provision requiring the landlord to give BNC written notice of Franchisee's defaults by Franchisee simultaneously with the issuance of any default notice sent to Franchisee.

ARTICLE 3. COMPLIANCE WITH BENIHANA SYSTEM AND BENIHANA STANDARDS

  • 3.1 BNC will make the BENIHANA Standards available to Franchisee in the Operations Manual (as defined in Section 4.1 of this Agreement) and in other forms of communications that BNC, in its sole discretion, may modify at any time during the Franchise Term.
  • 3.2 Franchisee must comply with the BENIHANA System and operate the Restaurant in accordance with the BENIHANA Standards. Franchisee acknowledges that compliance with the BENIHANA System, the BENIHANA Standards, and the provisions of the Operations Manual are reasonable requirements necessary to promote the goodwill associated with the BENIHANA System and the Marks to the mutual benefit of BNC, Franchisee, and other franchisees of BENIHANA Restaurants. 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 by Franchisee or other franchisees, as BNC deems appropriate in its sole discretion.

  • 3.3 Franchisee will use the Location solely for the operation of the Restaurant, and Franchisee must not, during the Franchise Term conduct, or permit others to conduct, any business activity at the Restaurant or the Location other than the operation of a BENIHANA Restaurant.
  • 3.3.1 Franchisee will not operate, permit, or grant any concession or license to operate at the Restaurant or the Location any vending machines, video or entertainment machines, games of skill, games of chance, or other similar device, without the specific and prior written consent of BNC.
  • 3.4 The Restaurant must be open for, at a minimum, the hours and days specified or approved by BNC in writing, which hours may be changed from time to time by BNC.
  • 3.5 Franchisee must designate, and retain in its employment, a person to serve as the "General Manager" of the Restaurant; and the General Manager must be responsible for, and devote his or her full time and best efforts to, supervision and management of the Restaurant. Franchisee also must otherwise staff the Restaurant with a sufficient number of employees trained in the BENIHANA System as required by BNC.
  • 3.5.1 The General Manager must satisfy BNC's educational and business criteria and applicable training requirements and be individually approved by BNC. If the General Manager ceases to be employed by Franchisee or is otherwise unavailable to manage the Restaurant, Franchisee must promptly, and in no event more than 120 days later, designate another person as General Manager, and that person must meet all criteria for a General Manager and be acceptable to and approved by BNC.
  • 3.6 Franchisee must, at its expense, continuously during the Franchise Term, maintain the Restaurant in good condition and repair in accordance with the BENIHANA Standards. The required maintenance, includes, but is not limited to, the replacement of worn carpeting or flooring, repainting and repair of walls, floors, wood trims, or ceilings, as needed, or the repair, refurbishment, or replacement of any damaged or worn fixtures, furniture, or decorative items, including all components of BNC's trade dress.
  • 3.7 Franchisee may use in the Restaurant only those brands, types, and models of signs displaying the Marks, equipment, or fixtures approved by BNC and that meet all BNC specifications Franchisee must purchase approved brands, types, and models of equipment, fixtures, and signs only from approved suppliers, unless otherwise agreed in writing by BNC.

  • 3.8 Franchisee must purchase, install, and maintain, at its expense, a point of sale data processing system and software as designated or approved from time to time by BNC (the "POS System). The POS System must contain a device that records accumulated sales that cannot be turned back or reset, and it must include a back-up power system for memory storage in the event of power loss. The POS System must provide a record of products sold, a menu mix report, and other reports required by BNC.

Source: Item 23 — Receipts (FDD pages 74–576)

What This Means (2024 FDD)

According to Benihana's 2024 Franchise Disclosure Document, franchisees must operate their restaurants in strict accordance with the Benihana System and Benihana Standards, as detailed in the Operations Manual. This includes using the location solely for the Benihana restaurant and refraining from conducting any other business activities without prior written consent from Benihana. The restaurant must adhere to the hours and days specified or approved by Benihana, which may be changed.

To ensure smooth operations, franchisees must designate and retain a General Manager who is responsible for the supervision and management of the restaurant, devoting their full time and best efforts to the role. This General Manager must meet Benihana's educational, business, and training criteria and be approved by Benihana. Additionally, the franchisee is responsible for staffing the restaurant with a sufficient number of employees trained in the Benihana System, as required by Benihana.

Franchisees are also responsible for maintaining the restaurant in good condition and repair, including replacements, repainting, and refurbishment, according to Benihana Standards. They must use only approved signs, equipment, and fixtures purchased from approved suppliers. A designated point-of-sale (POS) system must be installed and maintained at the franchisee's expense, with the ability for Benihana to retrieve data as needed, for which the franchisee covers the transmission costs. Franchisees must also update the POS system as required by Benihana.

Furthermore, franchisees must use only approved advertising and promotional materials, menus, and other items displaying Benihana's marks, securing prior written approval for all materials. They are required to use or offer for sale only designated or approved food and paper products, services, supplies, and packaging that meet Benihana Standards, maintaining a sufficient supply to meet customer demand. Compliance with all applicable local, state, and federal laws is mandatory, and franchisees must provide reports from governmental agencies to Benihana. Franchisees must also comply with Payment Card Industry Data Security Standards Requirements (PCI DSS).

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.