If Benihana directs a franchisee to make additions, alterations, repairs and replacements, are there any limitations on what Benihana can reasonably direct?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
You must keep the BENIHANA Restaurant very clean and maintain it in good repair and condition. You must make any additions, alterations, repairs and replacements, including repainting or replacement of obsolete signs, furnishings, equipment, and décor, as we may reasonably direct. You must not make any changes to the Restaurant or premises without our prior written consent. You must, at your expense, obtain and pay for any new or additional equipment, including a POS System, computer hardware and software, fixtures, supplies and other products and materials that you must have to offer and sell new menu items from the BENIHANA Restaurant or to provide services at the BENIHANA Restaurant by alternative means, such as through carryout, catering or delivery arrangements.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 58–59)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana franchisees are required to maintain their restaurants in good repair and condition. Benihana has the power to reasonably direct franchisees to make additions, alterations, repairs, and replacements, including repainting or replacing obsolete signs, furnishings, equipment, and décor. However, franchisees cannot make any changes to the restaurant or premises without Benihana's prior written consent.
This means that while franchisees are responsible for the upkeep of the restaurant, Benihana retains significant control over the appearance and functionality of the location. Franchisees must adhere to Benihana's directives regarding changes and updates to maintain brand consistency. This can include everything from the color of the paint to the type of equipment used.
Furthermore, franchisees are responsible for the expenses associated with these changes, including obtaining and paying for any new or additional equipment needed to offer new menu items or services. This could include a POS system, computer hardware and software, fixtures, supplies, and other materials. This financial responsibility underscores the importance of budgeting for ongoing maintenance and upgrades as directed by Benihana.
Overall, while Benihana maintains control over the restaurant's standards and appearance, the franchisee bears the financial burden of adhering to these standards. This arrangement highlights the importance of clear communication and understanding between Benihana and its franchisees regarding required updates and associated costs.