Does Benihana provide any representations about a franchisee's future financial performance in Item 19?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Alex Tabolsky, c/o 1624 Market Street, Suite 311, Denver, Colorado 80202 (email: Alex.Tabolsky@togrp.com), the Federal Trade Commission, and the appropriate state regulatory agencies.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 66–67)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana does not make any representations about a franchisee's future financial performance, nor does it provide information on the past financial performance of company-owned or franchised outlets. Benihana also does not authorize its employees or representatives to make any such representations, either orally or in writing.
However, if a prospective franchisee is purchasing an existing Benihana outlet, Benihana may provide the actual records of that specific outlet. The FDD advises that if a prospective franchisee receives any other financial performance information or projections of future income, they should report it to Benihana's management, the Federal Trade Commission, and the appropriate state regulatory agencies.
This policy is typical in franchising. Franchisees should be wary of any financial projections or promises made outside of the formal Item 19 disclosure, as these are not vetted by the franchisor and may be unreliable. It is important for potential Benihana franchisees to conduct their own independent financial analysis and due diligence, consulting with financial advisors and accountants, to determine the potential profitability of a Benihana franchise.