What happens if Benihana does not provide written disapproval of local advertising materials within fifteen days of receipt?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
In addition to the Advertising Contribution paid to us, you must spend in each of your fiscal years an amount ("Local Spend") that is not less than 4% of Gross Sales for local marketing and promotion.
Local Spend may consist of advertising via: television; radio; digital media; magazines or newspapers; direct mail; billboards; promotional brochures and literature; point-of-sale materials; or other approved advertising. All advertising, marketing, and promotional activities must be conducted in a dignified manner and must conform to our standards and requirements. You may not use any advertising, marketing or promotional plans or materials as part of your Local Spend unless and until you have received written approval from us. If you do not receive written disapproval from us within fifteen days of the date of our receipt of such samples or materials, we shall be deemed to have approved them. We may revoke our approval of any such plans or materials at any time effective upon written notice to you.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 36–47)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees are required to spend a minimum of 4% of gross sales on local marketing and promotion each fiscal year. This local spend can include various advertising channels such as television, radio, digital media, and print. However, all advertising materials must receive prior written approval from Benihana.
If a Benihana franchisee submits local advertising materials to the company for approval and does not receive written disapproval within fifteen days of receipt by Benihana, the materials are considered approved. This implies that franchisees can proceed with their local advertising plans if they do not hear back from Benihana within the specified timeframe.
However, Benihana retains the right to revoke its approval of any advertising plans or materials at any time by providing written notice to the franchisee. This means that even if advertising materials are initially deemed approved due to the lack of response within fifteen days, Benihana can later withdraw its approval, requiring the franchisee to cease using those materials. Franchisees should therefore ensure their advertising remains compliant with Benihana's standards and requirements to avoid potential issues.