How long does Benihana have after the expiration or termination of the franchise agreement to exercise its option to purchase the franchisee's furnishings, equipment, signs, fixtures, supplies, or inventory related to the operation of the Benihana restaurant?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 14.5 BNC has the option, which it can exercise within thirty (30) days after expiration or termination, to purchase from Franchisee any or all of Franchisee's furnishings, equipment, signs, fixtures, supplies, or inventory related to the operation of the Restaurant, at a price equal to Franchisee's cost or fair market value, whichever is less.
- 14.5.1 If the parties cannot agree on a fair market value within a reasonable time, BNC will designate an independent appraiser, whose determination will be binding.
- 14.5.2 If BNC elects to exercise its purchase option under this subsection, BNC has a right to set off against the purchase price all amounts due from Franchisee and the cost of the appraisal.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana has the option to purchase a franchisee's assets after the franchise agreement expires or terminates. This option allows Benihana to buy furnishings, equipment, signs, fixtures, supplies, or inventory related to the restaurant's operation.
Benihana has a limited time frame to exercise this option. Specifically, Benihana must make its decision within thirty (30) days after the expiration or termination of the franchise agreement. The purchase price will be the franchisee's cost or the fair market value of the items, whichever is less.
If Benihana and the franchisee cannot agree on the fair market value of the assets, Benihana will designate an independent appraiser to determine the value, and this determination will be binding. Furthermore, if Benihana chooses to exercise its purchase option, it has the right to deduct any amounts owed by the franchisee, as well as the cost of the appraisal, from the purchase price.