If a Benihana franchisee fails to modify the restaurant's appearance after termination or expiration, what right does Benihana have regarding the premises?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.1.7 Franchisee must immediately make or cause to be made modifications and alterations to the Restaurant to distinguish the appearance of the Restaurant from that of other BENIHANA Restaurants, including all specific changes BNC may request for that purpose. Franchisee must furnish BNC with evidence satisfactory to BNC of Franchisee's compliance with this obligation within seven (7) days after termination or expiration of this Agreement.
- 14.1.7.1 If Franchisee fails to comply with the requirements of this Section 14.1.7, in addition to any other rights BNC has under this Agreement, BNC has the right to enter upon the premises where the Restaurant was operated, without being guilty of trespass or any other tort, for the purpose of making or causing to be made, at Franchisee's expense, the changes required by this Agreement.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee fails to make the required modifications and alterations to distinguish the restaurant's appearance from other Benihana restaurants after the termination or expiration of the franchise agreement, Benihana has specific rights. Benihana has the right to enter the premises where the restaurant was operated. This entry can be done without being considered guilty of trespass or any other tort. The purpose of this entry is to make or cause to be made the changes required by the agreement.
Importantly, the FDD stipulates that these changes will be completed at the franchisee's expense. This means the franchisee will bear the financial burden of bringing the restaurant into compliance with the de-identification requirements set forth by Benihana. This provision is designed to protect Benihana's brand and ensure that a former franchisee does not continue to benefit from the Benihana image or system after the agreement ends.
This clause highlights the importance of franchisees adhering to the post-termination obligations outlined in the franchise agreement. Failure to comply can result in Benihana taking direct action to alter the premises at the franchisee's cost, potentially leading to unexpected expenses for the former franchisee. Franchisees should carefully review and understand these obligations to avoid such situations upon termination or expiration of their Benihana franchise agreement.