What interest rate will be applied to understated payments from a Benihana franchisee?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
payments due in any report submitted to BNC, then Franchisee will pay, and BNC will have the independent right to immediately debit from Franchisee's bank account, the payments due to BNC, with interest from the date each amount was due until it was debited or paid, at the rate of 18% per annum, or the maximum rate permitted by law, whichever is less.
- 8.5.2 If an inspection, review, or audit discloses an understatement in any report of 3% or more, Franchisee must also pay, and BNC independently may debit from Franchisee's bank account, an amount to reimburse BNC for all costs and expenses incurred by BNC in connection with the inspection, review, or audit, including, without limitation, travel, lodging, wages, and reasonable accounting and legal costs.
- 8.5.3 The foregoing remedies are in addition to any other remedies BNC may have under this Agreement.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, if a franchisee understates payments due in any report submitted to BNC (Benihana National Corporation), the franchisee will be required to pay the understated amount. Benihana has the right to immediately debit the franchisee's bank account for the payments due.
Interest will be applied to the understated payments from the date the amount was originally due until it is debited or paid. The interest rate will be 18% per annum, or the maximum rate permitted by law, whichever is less.
Additionally, if an inspection, review, or audit reveals an understatement of 3% or more in any report, the franchisee must also reimburse Benihana for all costs and expenses incurred during the inspection, review, or audit. This includes costs related to travel, lodging, wages, and reasonable accounting and legal fees. These remedies are in addition to any other remedies Benihana may pursue under the Franchise Agreement.