Does Benihana make any representations about the past financial performance of company-owned outlets?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ITEM 19. FINANCIAL PERFORMANCE REPRESENTATIONS
The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; o
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 66–67)
What This Means (2024 FDD)
According to the 2024 Benihana Franchise Disclosure Document, Item 19 allows franchisors to provide information about the actual or potential financial performance of its franchised and/or company-owned outlets if there is a reasonable basis for the information, and if the information is included in the disclosure document. The document also states that financial performance information that differs from that included in Item 19 may be given only if a franchisor provides the actual records of an existing outlet you are considering buying.
However, this excerpt does not specify whether Benihana provides specific data on the past financial performance of its company-owned restaurants. The document only acknowledges the possibility of providing such information under specific conditions as per the FTC's Franchise Rule.
Therefore, a prospective franchisee should review Item 19 of the FDD carefully to determine if Benihana has made any financial performance representations. If this information is not available, it is advisable to directly ask Benihana for detailed financial performance data for company-owned restaurants to better understand potential earnings and investment returns.