What is the permitted use of the premises according to the Benihana franchise agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
(b) A provision which restricts the use of the premises solely to the operation of a BENIHANA Restaurant.
3.5 During the entire Franchise Term, Franchisee shall not carry on or conduct, or permit others to carry on or conduct, any other business activity or operation at the Restaurant or the Location other than the operation of the Restaurant permitted under this Agreement.
3.6 Franchisee shall not operate, permit or grant any concession or license to operate at the Restaurant or the Location any vending machines, video or entertainment machines, games of skill, games of chance, or other similar device, without the prior written consent of BNC in each instance.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the permitted use of the premises is strictly limited to the operation of a Benihana Restaurant. The franchise agreement stipulates that if a franchisee leases the location, Benihana may require a provision in the lease that restricts the use of the premises solely to the operation of a Benihana Restaurant. This ensures that the location is exclusively used for the franchised business.
Benihana maintains tight control over the brand and customer experience. Franchisees are prohibited from conducting any other business activities at the Restaurant location other than the operation of the Benihana Restaurant as permitted under the franchise agreement. This restriction is in place for the entire duration of the franchise term, reinforcing the brand's consistency and preventing any deviation from the core business model.
Furthermore, franchisees are not allowed to operate, permit, or grant concessions or licenses for vending machines, video or entertainment machines, games of skill or chance, or other similar devices at the Restaurant without prior written consent from Benihana. This clause ensures that the franchisee focuses solely on the core restaurant business and does not introduce any elements that could dilute the brand or detract from the customer experience. These strict controls are typical in franchising to maintain uniformity and protect the brand's reputation.