What was Benihana, Inc.'s response to Benihana of Tokyo, LLC's arbitration demand?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
On April 13, 2016, BOT filed a demand for arbitration with the American Arbitration Association asserting that BI breached the Hawaii License Agreement by unreasonably withholding approval for BOT's menu and advertisements for the Hawaii restaurant.
BI answered the demand on May 16, 2016, and denied all claims.
Subsequently, on February 27, 2017, BI served BOT with written Notice of Termination of the Hawaii License Agreement based on BOT's various breaches.
Accordingly, on March 17, 2017, BI filed an Amended Answer and Counterclaim seeking a determination that the Notice of Termination was reasonable.
On June 23, 2017, BOT filed an Amended Demand, asserting an additional claim for breach of the Hawaii License Agreement based on BI's purported failure to approve BOT's request to open a second restaurant in Hawaii.
In March 2018, the parties took part in a four-day arbitration hearing and the arbitration panel issued an award in favor of BI in all respects, including upholding BI's termination of the Hawaii License Agreement.
The Award was confirmed by the United States District Court for the Southern District of New York in January 2019.
Source: Item 3 — LITIGATION (FDD pages 14–16)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana, Inc. (BI) answered the arbitration demand filed by Benihana of Tokyo, LLC (BOT) on May 16, 2016, denying all claims made by BOT. The initial demand, filed on April 13, 2016, with the American Arbitration Association (Claim No. 01 16 0001 3078), alleged that Benihana breached the Hawaii License Agreement by unreasonably withholding approval for BOT's menu and advertisements for the Hawaii restaurant.
Subsequently, on February 27, 2017, Benihana served BOT with a written Notice of Termination of the Hawaii License Agreement due to BOT's alleged breaches. Consequently, on March 17, 2017, Benihana filed an Amended Answer and Counterclaim, seeking a determination that the Notice of Termination was reasonable. BOT then filed an Amended Demand on June 23, 2017, asserting an additional claim for breach of the Hawaii License Agreement based on Benihana's purported failure to approve BOT's request to open a second restaurant in Hawaii.
In March 2018, the parties participated in a four-day arbitration hearing, and the arbitration panel ultimately issued an award in favor of Benihana in all respects, including upholding Benihana's termination of the Hawaii License Agreement. The United States District Court for the Southern District of New York confirmed this award in January 2019. This outcome is favorable for Benihana as it demonstrates their ability to defend their brand standards and contractual agreements.