What items must a Benihana franchisee deliver to BNC immediately upon termination of the Franchise Agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
14.1 Upon termination or expiration of this Agreement for any reason, all rights granted under this Agreement to Franchisee shall immediately terminate, and Franchisee shall strictly comply with the following obligations:
(a) Franchisee shall immediately cease to operate the Restaurant.
(b) Franchisee shall immediately and permanently cease to use in any manner the Marks, including, without limitation, the service marks "BENIHANA", "Benihana of Tokyo" and the "flower" symbol, or any confusingly similar trademark, service mark, trade name or insignia.
(c) Franchisee shall not thereafter directly or indirectly identify itself in any manner as a franchisee of the BENIHANA System or former BNC licensee or franchisee.
(d) Franchisee shall immediately and permanently cease to use in any manner whatsoever, any Confidential Information, the BENIHANA System, and any of BNC's methods, procedures and techniques associated with the BENIHANA System; the BENIHANA trade dress and distinctive forms, slogans, signs, symbols and devices associated with the BENIHANA System.
Without limiting the generality of the foregoing, Franchisee shall cease to use all fixtures, displays, decorations, stationery, forms, advertising materials and other articles used in connection with Franchisee's operation of the Restaurant.
- (e) Franchisee shall immediately make or cause to be made such modifications and alterations to the Location and the Restaurant to distinguish the appearance of the Location and Restaurant from other BENIHANA Restaurants and shall make such specific additional changes thereto as BNC may request for that purpose.
If Franchisee fails or refuses to comply with the requirements of this Section 14.1 (e), in addition to any other rights BNC has under this Agreement, BNC shall have the right to enter upon the premises where the Restaurant was operated, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at Franchisee's expense, which expense Franchisee agrees to pay upon demand.
- (f) Franchisee shall take all actions necessary to cancel any assumed names or equivalent registrations containing any of the Marks.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee faces several immediate obligations. The franchisee must cease operating the restaurant and discontinue using Benihana's trademarks, service marks like "BENIHANA" and "Benihana of Tokyo", and the flower symbol. They are also prohibited from identifying themselves as a Benihana franchisee or former licensee. This means the franchisee loses all rights to operate under the Benihana brand and system.
Furthermore, the franchisee must stop using any confidential information, the Benihana system, and any of Benihana's methods, procedures, and techniques. This includes the trade dress, distinctive forms, slogans, signs, symbols, and devices associated with the Benihana system. Specifically, the franchisee must cease using all fixtures, displays, decorations, stationery, forms, and advertising materials connected with the restaurant's operation. This ensures that the terminated franchisee does not continue to benefit from or misrepresent the Benihana brand.
Additionally, the franchisee is required to modify the location and restaurant to differentiate its appearance from other Benihana restaurants. These changes must be specific and meet Benihana's requests. If the franchisee fails to make these changes, Benihana has the right to enter the premises and make the necessary alterations at the franchisee's expense. The franchisee must also take action to cancel any assumed names or equivalent registrations that contain any of Benihana's marks. These stipulations are in place to protect Benihana's brand identity and prevent any confusion or unfair competition after the franchise agreement ends.