If a Benihana franchisee makes a misrepresentation under Section 21.6, what is the consequence?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
21.6 Franchisee shall comply with and assist BNC to the fullest extent possible in BNC's efforts to comply with the Anti-Terrorism Laws (as defined below). Franchisee shall not hire nor have any dealings with any person listed on the SDN List, as it may be modified from time to time. Franchisee is solely responsible specifically acknowledges and agrees that Franchisee's indemnification obligations under this Agreement pertain to Franchisee's obligations under this Section 21.6. Any misrepresentation by Franchisee under this Section 21.6, or any violation of any Anti-Terrorism Laws by Franchisee, Franchisee's owners, principals or employees, shall constitute grounds for immediate termination of this Agreement and any other agreement Franchisee has entered into with BNC or its affiliates. As used herein, "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, any misrepresentation by a franchisee under Section 21.6 of the franchise agreement, or any violation of Anti-Terrorism Laws by the franchisee, its owners, principals, or employees, constitutes grounds for immediate termination of the agreement. This includes any other agreements the franchisee has entered into with Benihana or its affiliates.
Section 21.6 requires the franchisee to comply with and assist Benihana in complying with Anti-Terrorism Laws. The franchisee must not hire or have any dealings with any person listed on the Specially Designated Nationals (SDN) List. The franchisee is solely responsible for adhering to these obligations and acknowledges that their indemnification obligations under the agreement pertain to these responsibilities.
The Anti-Terrorism Laws, as defined in the franchise agreement, include Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, the Cuban Assets Control Regulations, the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
This clause places a significant responsibility on the Benihana franchisee to ensure compliance with all applicable anti-terrorism laws and regulations, with severe consequences for any misrepresentation or violation. Prospective franchisees should carefully review these requirements and ensure they have the resources and procedures in place to meet these obligations.