Is Benihana permitted to develop other systems using its trademarks and grant licenses or franchises in those systems without providing any rights to existing franchisees?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
The license to use the Marks granted to you under the Franchise Agreement is nonexclusive to you. We have and retain certain rights in the Marks including the following:
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- To grant other licenses for use of the Marks in addition to those licenses already granted to existing franchisees;
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- To develop and establish other systems using the Marks or other names or marks and to grant licenses or franchises in those systems without providing any rights to you; and
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- To engage, directly or indirectly, at wholesale, retail or otherwise, in (a) the production, distribution, license and sale of products and services and (b) the use of the Marks and all trademarks, trade names, service marks, logos, insignia, slogans, emblems, symbols, designs, and other identifying characteristics we may develop for that purpose.
Source: Item 13 — TRADEMARKS (FDD pages 49–55)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana retains specific rights regarding its trademarks, including the right to develop other systems using the Benihana trademarks. This means that Benihana can create entirely new business models or franchise systems that utilize the same trademarks as existing Benihana restaurants.
Importantly, Benihana is not obligated to provide any rights to existing franchisees when it develops and grants licenses or franchises in these new systems. This implies that a current Benihana franchisee would not automatically have the opportunity to participate in or benefit from these new ventures unless specifically offered by Benihana. This could include different restaurant concepts, retail products, or service offerings that operate under the Benihana brand.
This aspect of the franchise agreement is crucial for prospective franchisees to understand. While investing in a Benihana franchise provides the right to operate a restaurant under the established brand, it does not guarantee any stake in future brand expansions or related business opportunities that Benihana may pursue. Franchisees should consider this when evaluating the long-term potential and risks associated with the franchise.