What legal, financial, and operational standards must a Benihana franchisee meet to be eligible for a successor franchise agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2.4 Franchisee submits to BNC all information and documentation as reasonably requested by BNC as a prerequisite for the issuance of a franchise agreement as of the date of the expiration of the Franchise Term;
- 17.2.5 Franchisee meets all of BNC's then-existing legal, financial, and operational standards applicable to new franchisees contained in the then-current form of franchise agreement and the then-current operating standards in effect for the BENIHANA System;
- 17.2.6 Franchisee re-models or contracts to re-model the Restaurant, including building, signs, equipment, furnishings, and décor, to the extent required and approved by BNC to reflect the then-current image of BENIHANA Restaurants;
- 17.2.7 Franchisee tenders to BNC, in lieu of the Franchisee Fee specified in the Successor Franchisee Agreement, an administrative fee equal to twenty percent (20%) of the Franchise Fee in existence on the date of the expiration of the Franchise Term;
- 17.2.8 Franchisee executes a general release, in the form BNC requires, of any and all claims against BNC and its affiliates, successors, and assigns, and their respective officers, directors, agents and employees; and
- 17.2.9 Franchisee satisfies all monetary obligations owed to BNC by Franchisee and Franchisee's affiliates.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee seeking a successor franchise agreement must meet several standards. Benihana requires the franchisee to submit all reasonably requested information and documentation. The franchisee must meet all of Benihana's then-existing legal, financial, and operational standards applicable to new franchisees, as outlined in the current franchise agreement and operating standards.
Operationally, the franchisee must remodel or contract to remodel the restaurant to reflect Benihana's current image, including the building, signs, equipment, furnishings, and décor, to the extent required and approved by Benihana. The franchisee must also execute a general release of all claims against Benihana and its affiliates.
Financially, the franchisee must tender an administrative fee equal to twenty percent of the franchise fee in existence on the date of the expiration of the franchise term, instead of the franchisee fee specified in the Successor Franchise Agreement. Additionally, the franchisee must satisfy all monetary obligations owed to Benihana by the franchisee and the franchisee's affiliates. Meeting these requirements does not guarantee a successor agreement, but it establishes the necessary conditions for eligibility.