What are Benihana licensees required to adhere to in addition to the specific guidelines set forth by Benihana?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
en and in operation for such minimum hours and days specified or approved by BNC in writing, which hours may be changed from time to time by BNC.
- 3.4 Franchisee must designate and retain in its employment at all times a person to serve as the "General Manager" of the Restaurant. Franchisee shall at all times otherwise staff the Restaurant with a sufficient number of employees trained in the BENIHANA System as required by BNC. The General Manager must satisfy BNC's educational and business criteria and must be individually acceptable to BNC. In addition, the General Manager must be responsible for the supervision and management of the Restaurant, and must devote full time and best efforts to this activity. The General Manager also must satisfy BNC's applicable training requirements. If the General Manager ceases to be employed by Franchisee and available to manage the Restaurant, Franchisee must promptly, and in no event more than 120 days later, designate another person as General Manager, and that person must meet all criteria for a General Manager and be acceptable and approved by BNC.
- 3.5 During the entire Franchise Term, Franchisee shall not carry on or conduct, or permit others to carry on or conduct, any other business activity or operation at the Restaurant or the Location other than the operation of the Restaurant permitted under this Agreement.
- 3.6 Franchisee shall not operate, permit or grant any concession or license to operate at the Restaurant or the Location any vending machines, video or entertainment machines, games of skill, games of chance, or other similar device, without the prior written consent of BNC in each instance.
- 3.7 Franchisee shall, at its expense, continuously throughout the Franchise Term, maintain the Restaurant in good condition and repair in accordance with the BENIHANA Standards. Such maintenance shall include, without limitation, the repainting of walls, floors, flooring, or ceilings, as needed, or the repair, refurbishment, or replacement of any damaged or worn fixtures, furniture, equipment, or decorative
items or components of BNC's trade dress.
- 3.8 Franchisee shall use in the Restaurant only those brands, types and models of signs displaying the Marks, equipment, or fixtures that are approved by BNC and meet all specifications established by BNC. Franchisee must purchase approved brands, types, and models of equipment, fixtures, and signs which meet BNC's specifications only from approved suppliers, unless otherwise agreed in writing by BNC.
- 3.9 Franchisee agrees to purchase, install, and maintain, at its expense, a point of sale data processing system and software as designated or approved from time to time by BNC (the "POS System"). The POS System shall contain a device to record accumulated sales that cannot be turned back or reset, and a back-up power system for memory storage in the event of power loss. The POS System will provide a record of products sold, a menu mix report, and other reports required by BNC. BNC shall have the right to retrieve such data and information directly from Franchisee's POS System as BNC shall deem necessary. Franchisee shall be responsible for the telephonic or transmission costs of such retrieval. Franchisee will install any new or upgraded software programs and equipment whenever BNC adopts such new programs for all franchisees to ensure full operational efficiency and communications capability. Franchisee shall update and upgrade the POS System as designated by BNC. BNC may require Franchisee to enter into a separate maintenance agreement for the POS System at any time.
- 3.10 Franchisee will only use advertising and promotional materials or items that are authorized and approved in writing by BNC in advance of their use by Franchisee.
- 3.11 Franchisee shall use or offer for sale at the Restaurant only those food and paper products, services, supplies, and packaging designated or approved by BNC in writing. The parties agree that the products offered at the Restaurant will be those products listed on SCHEDULE 1-A to this Agreement. The parties agree to consult regarding changes to the products to be offered at the Restaurant, and Franchisee agrees that BNC retains the sole and unfettered discretion to determine what products may be offered at the Restaurant. All products and services, including the sale, distribution and delivery of such products, must meet the BENIHANA Standards. Franchisee further agrees to discontinue offering for sale any product (even if listed on SCHEDULE 1), or using any supplies, paper products or packaging that BNC may, at any later time, in its sole discretion, no longer approve for sale or use at the Restaurant. Franchisee shall maintain at all times a sufficient supply of approved products to meet customer demand at the Restaurant.
- 3.11.1 The parties expressly acknowledge and agree that, in addition to the BENIHANA products to be served at the Restaurant, Franchisee will offer for sale products to be agreed upon by the parties under the RA® SUSHI name and trademarks (and listed on SCHEDULE 1-A to this Agreement).
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees must adhere to several requirements beyond the standard Benihana system guidelines. Benihana franchisees must designate and retain a General Manager who meets Benihana's criteria, and staff the restaurant with a sufficient number of trained employees. The General Manager must meet Benihana's educational and business criteria, be individually acceptable to Benihana, responsible for the supervision and management of the Restaurant, devote full time and best efforts to this activity, and satisfy Benihana's applicable training requirements. If the General Manager leaves, the franchisee has 120 days to find a replacement that meets Benihana's approval.
During the franchise term, franchisees cannot conduct any other business activity at the restaurant location besides operating the Benihana restaurant. Franchisees are prohibited from operating or permitting vending machines, video or entertainment machines, games of skill or chance, or similar devices without prior written consent from Benihana. The restaurant must be continuously maintained in good condition and repair according to Benihana standards, including repainting and replacing damaged items. Only approved brands, types, and models of signs, equipment, and fixtures that meet Benihana's specifications can be used.
Upon termination or expiration of the franchise agreement, franchisees must immediately cease operating the restaurant and discontinue using Benihana's marks, trade names, and the Benihana System. They cannot identify themselves as a former Benihana franchisee and must stop using any confidential information, methods, procedures, and techniques associated with the Benihana System. Franchisees must modify the location to distinguish it from other Benihana restaurants, and cancel any assumed names or registrations containing Benihana's marks. Franchisees must also execute a general release of claims against Benihana and satisfy all monetary obligations to Benihana.