What is the initial non-refundable franchise fee for a Benihana franchise?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
nt Marks for use in identifying the BENIHANA System and BENIHANA Restaurants. Franchisee shall comply with all such modifications and/or substitutions.
ARTICLE 7. ROYALTIES AND ADVERTISING CONTRIBUTIONS TO BNC
- 7.1 Franchisee shall pay to BNC in full upon the acceptance and execution of this Agreement by BNC an initial non-refundable franchise fee ("Franchise Fee") in the amount of Forty Thousand Dollars ($40,000).
- 7.2. During the Franchise Term, Franchisee will pay to BNC on a monthly basis for the use of the Marks a recurring, non-refundable royalty of five percent (5%) of Gross Sales (as defined below) of the Restaurant ("Royalties"). Royalties are due and payable by Franchisee on the fifteenth (15th) day of each calendar month based upon Gross Sales at the Restaurant for the preceding month. If the 15th day of any month is a Saturday, Sunday, or national holiday, Royalties will be due and payable on the first business day following the 15th day of the month.
- 7.3. During the Franchise Term, Franchisee will pay to BNC for the use of the Marks a recurring, non-refundable advertising fee ("Advertising Contributions") of two percent (2%) of Gross Sales. Advertising Contributions are due and payable on the fifteenth (15th) day of each calendar month based upon Gross Sales at the Restaurant for the preceding month. If the 15th day of any month is
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the initial non-refundable franchise fee is $40,000. This fee is due upon the acceptance and execution of the Franchise Agreement by Benihana.
As the fee is non-refundable, a prospective Benihana franchisee should be aware that this money is forfeited once the agreement is accepted, regardless of whether the restaurant ever opens or if the agreement is later terminated. This is a standard practice in franchising, as the initial fee compensates the franchisor for the initial costs and expenses it incurs to establish the franchise relationship.
In addition to this initial franchise fee, Benihana franchisees must also pay ongoing royalties and advertising contributions. These are calculated as a percentage of the restaurant's gross sales. Specifically, the royalty fee is 5% of gross sales, and the advertising contribution is 2% of gross sales. These recurring fees are non-refundable and are paid monthly.