If a Purchasing Program is established in the area encompassing a Benihana Restaurant during the Franchise Term, what is the franchisee required to do?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.17 BNC shall have the right, in its discretion, to designate any geographical area for purposes of establishing a purchasing program ("Purchasing Program").
If a Purchasing Program is established in the area encompassing the Restaurant when Franchisee opens for business, or is established during the Franchise Term, Franchisee shall immediately participate in the Purchasing Program.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if Benihana establishes a Purchasing Program in the area of a franchisee's restaurant either when the restaurant opens or at any point during the franchise term, the franchisee must immediately participate in that Purchasing Program.
This means that Benihana franchisees are obligated to source products and supplies through the designated program once it is implemented. This requirement ensures consistency and potentially leverages bulk purchasing power for better pricing and standardized quality across the Benihana system.
However, franchisees should be aware that participation in the Purchasing Program is mandatory and immediate, leaving them little to no choice in selecting suppliers independently once the program is in place. Franchisees should inquire about the details of potential Purchasing Programs, including the range of products covered, pricing structures, and the process for evaluating and selecting suppliers, to fully understand the implications of this requirement.