If a Benihana franchisee receives an offer for a Controlling Ownership Interest, what information and documentation must they provide to BNC?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.5 If Franchisee decides to accept a bona fide offer from a third-party purchaser ("Proposed Transferee") to purchase the franchise license rights granted under this Agreement, the Restaurant, or any other interest that will result in a transfer of fifty percent (50%) or more of Franchisee (a "Controlling Ownership Interest") (collectively, a "Third-Party Disposition"), Franchisee must, before consummating the Third-Party Disposition, notify BNC in writing of each such offer and provide all information and documentation relating to the offer as BNC may require.
BNC will have the right and option to acquire the Controlling Ownership Interest on the same terms and conditions offered by the Proposed Transferee.
11.5.1 Any offer by a Proposed Transferee for a Controlling Ownership Interest presented to BNC under this Article 11 must be in writing and include a signed copy of the agreement between Franchisee and the Proposed Transferee and a description of, and information concerning, the Proposed Transferee and any principals, including financial statements and relevant restaurant operating experience, if any.
11.5.2 BNC has thirty (30) days after receipt from Franchisee of the written offer in which to accept the offer or waive its right of first refusal ("ROFR Decision").
BNC will communicate its ROFR Decision in writing delivered to Franchisee.
If BNC does not communicate its ROFR Decision with such thirty (30) day period, BNC will be deemed to have waived its right of first refusal.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee decides to accept an offer from a third party to purchase the franchise license rights, the Restaurant, or any other interest that results in a transfer of 50% or more of the franchisee (defined as a "Controlling Ownership Interest"), the franchisee must notify Benihana in writing of the offer. This notification must occur before the franchisee consummates the sale. The franchisee must also provide all information and documentation relating to the offer as Benihana may require. Benihana retains the right and option to acquire the Controlling Ownership Interest on the same terms and conditions offered by the third party.
Any offer presented to Benihana for a Controlling Ownership Interest must be in writing and include a signed copy of the agreement between the franchisee and the proposed transferee. The offer must also include a description of, and information concerning, the proposed transferee and any principals, including financial statements and relevant restaurant operating experience, if any.
Benihana has 30 days after receiving the written offer from the franchisee to either accept the offer or waive its right of first refusal. Benihana will communicate its decision in writing to the franchisee. If Benihana does not communicate its decision within the 30-day period, it will be deemed to have waived its right of first refusal. This process ensures Benihana maintains control over who enters their franchise system and protects their brand standards.