What is the initial franchise fee for a Benihana franchise, and when is it due?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| TYPE OF EXPENDITURE | AMOUNT | METHOD OF PAYMENT | WHEN DUE | TO WHOM PAYMENT IS TO BE MADE |
|---|---|---|---|---|
| Initial Franchise Fee | $40,000 | Lump Sum | At signing of franchise agreement | Us |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–28)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the initial franchise fee is $40,000. This fee must be paid in a lump sum when the franchise agreement is signed.
This initial franchise fee grants the franchisee the right to operate a Benihana restaurant under the company's brand name and system. It covers Benihana's initial costs in evaluating and approving the franchisee, providing initial training, and offering support to help the franchisee establish their business.
Prospective franchisees should be aware that the initial franchise fee is just one component of the total initial investment, which ranges from $3,405,200 to $6,250,000. Other significant costs include real estate improvements, equipment, opening inventory, and additional funds for the first three months of operation. It is important to have sufficient capital to cover all these expenses.
As is typical in franchising, the initial franchise fee is non-refundable. Therefore, it is crucial for potential Benihana franchisees to conduct thorough due diligence, carefully review the Franchise Disclosure Document, and seek professional advice before signing the franchise agreement and paying the initial fee.