What modifications must a Benihana franchisee make to the location and restaurant upon termination or expiration of the Franchise Agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (e) Franchisee shall immediately make or cause to be made such modifications and alterations to the Location and the Restaurant to distinguish the appearance of the Location and Restaurant from other BENIHANA Restaurants and shall make such specific additional changes thereto as BNC may request for that purpose.
If Franchisee fails or refuses to comply with the requirements of this Section 14.1 (e), in addition to any other rights BNC has under this Agreement, BNC shall have the right to enter upon the premises where the Restaurant was operated, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at Franchisee's expense, which expense Franchisee agrees to pay upon demand.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, a franchisee must make specific modifications and alterations to the restaurant location to differentiate it from other Benihana restaurants. These changes must be made to the location and restaurant to distinguish its appearance from other Benihana restaurants. Benihana has the right to request specific additional changes for this purpose.
If the franchisee fails to make these required modifications, Benihana has the right to enter the premises and make the changes themselves at the franchisee's expense. The franchisee is obligated to pay these expenses upon demand. This ensures that the location no longer resembles a Benihana restaurant, protecting the brand's image and preventing customer confusion.
This requirement is a standard practice in franchising to ensure that a former franchisee does not continue to benefit from the brand's reputation after the agreement ends. It also protects Benihana's brand identity and prevents any potential association with a business no longer adhering to its standards. Prospective franchisees should be aware of these obligations and factor in the potential costs of these modifications when considering the franchise opportunity.