How long does a Benihana franchisee have to open the restaurant for business from the date of the agreement before it's considered a default?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 13.2 The following acts are each a material act of default under this Agreement and are good cause for termination:
- 13.2.1 If the Restaurant does not open for business to the public within eighteen
- (18) months from the date of this Agreement, or such later date as approved by BNC in writing.
There is no cure period for an act of default under this provision.
- 13.2.2 Franchisee does not begin the design, construction, equipping, and process of opening the Restaurant within six (6) months of the date of this Agreement, or such later date approved by BNC in writing.
There is no cure period for an act of default under this provision.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee typically has 18 months from the date of the franchise agreement to open their restaurant for business. Failure to do so constitutes a material act of default, which can lead to the termination of the agreement.
Benihana may approve a later date in writing, providing some flexibility. However, if the restaurant isn't open within the initially agreed-upon or extended timeframe, the franchisee is in default. There is no cure period for this particular default, meaning Benihana can terminate the agreement immediately without giving the franchisee an opportunity to rectify the situation.
Additionally, franchisees must begin the design, construction, equipping, and process of opening the Restaurant within six months of the date of this Agreement, or such later date approved by BNC in writing. There is also no cure period for this act of default.