Does Benihana offer an exclusive or protected territory to franchisees?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as expressly provided in this Item 12, we do not offer you an exclusive or protected territory.
During the term of your franchise agreement, if you are in full compliance with the Franchise Agreement, we will not operate or license any person or entity other than you to operate a BENIHANA Restaurant at any location that is within the "Restaurant Area" identified in the Contract Data Sheet attached to your Franchise Agreement. For franchises offered under this Disclosure Document, the restaurant area granted may be a zero to threemile radius from the franchisee's BENIHANA Restaurant, depending on market circumstances. You may face competition from other BENIHANA franchisees and company-owned restaurants located outside of the Restaurant Area, from businesses that we own, from other channels of distribution, and from competitive brands operated or controlled by us or our affiliates or parents.
As described previously in this Disclosure Document, we and BOT have established BENIHANA Restaurants and franchises using the Marks in various locations in the United States and elsewhere. We will continue to open and operate company-owned restaurants and to license others to operate franchises. You do not receive the right to acquire additional franchises within your Restaurant Area. We and our affiliates may operate, or license third parties the right to operate, other types of restaurants within the Restaurant Area (i.e., other than those featuring the teppanyaki or hibachi style of cooking) including, without limitation, Asian-style fast food and sushi restaurants, RA SUSHI restaurants, and bars, or other businesses which may use our trademarks or trade names (but not the names BENIHANA or "BENIHANA OF TOKYO") and may sell or license others to sell food products using such trademarks or trade names on a wholesale or retail basis in the Restaurant Area.
Source: Item 12 — TERRITORY (FDD pages 47–49)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana typically does not offer exclusive or protected territories to its franchisees. However, franchisees may receive a "Restaurant Area," within which Benihana will not operate or license another Benihana restaurant, provided the franchisee is in full compliance with the Franchise Agreement.
The size of the Restaurant Area for franchises offered under the 2024 Disclosure Document may range from zero to three miles in radius from the franchisee's Benihana Restaurant, depending on market circumstances. This means a franchisee's protected area could be non-existent, offering no territorial protection at all. Even with a Restaurant Area, franchisees may face competition from other Benihana franchisees and company-owned restaurants located outside of their Restaurant Area.
Furthermore, Benihana and its affiliates retain the right to operate other types of restaurants, including Asian-style fast food, sushi restaurants like RA Sushi, and bars, within the franchisee's Restaurant Area. They can also sell or license others to sell food products using their trademarks (excluding "Benihana" or "Benihana of Tokyo") within the Restaurant Area. Benihana also has the right to operate competing restaurants other than a Benihana Restaurant at any location, including restaurants using the trademarks RA Sushi and HARU. These factors could significantly impact a franchisee's potential customer base and revenue.