What is the radius, in kilometers, around a Benihana location within which a franchisee is prohibited from owning or operating a competing Japanese teppanyaki or sushi restaurant?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
(c) own, maintain, operate, or have any direct or indirect interest in any restaurant or food service business that is or holds itself out to the public as a Japanese teppanyaki style or sushi restaurant or food service (a "Competing Business") within 150 kilometers of the Location; or
(d) own, maintain, operate, or have any direct or indirect interest in any Competing Business which business is, or is intended to be, located within a ten (10) kilometer radius of any BENIHANA Restaurant, or any other restaurant which is owned, operated, or franchised by BNC, Benihana of Tokyo, Benihana, Inc., or any Affiliated Company.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee is restricted from owning or operating a competing Japanese teppanyaki or sushi restaurant within a 10-kilometer radius of any Benihana restaurant. This restriction applies during the franchise term.
This non-compete clause prevents franchisees from directly competing with existing Benihana locations, protecting the brand's market share and goodwill. However, Benihana retains the right to reduce the scope of this covenant at its discretion, which could potentially allow competition closer to a franchisee's location if Benihana chooses to modify the agreement.
It is important to note that this restriction applies to the franchisee and their principals, meaning owners or major stakeholders. This ensures that those with significant influence over the franchise's operations are also bound by the non-compete agreement. A "Competing Business" is defined specifically as a Japanese teppanyaki style or sushi restaurant or food service, so other types of restaurants would not be included in this restriction.