What is the range of per-unit payments that Benihana receives from approved suppliers based on franchisee purchases?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
compensation.
We sometimes negotiate arrangements with certain vendors to pay rebates or apply price discounts on account of purchases by company-owned and franchised restaurants. As of the issuance date of this Disclosure Document, certain approved suppliers make payments to us based in part on franchisee purchases. Some suppliers make payments to us on a per-unit basis, ranging from $0.50 to $5.50 per unit purchased, depending on the supplier, the specific product, and the total unit volume purchased that. Another supplier provides payments in the nature of rebates of 5.0% of net purchases. During our fiscal year ending March 31, 2024, we received $29,709.25 from these suppliers on account of franchisee purchases. We remitted to franchisees 100% of those payments made by suppliers on account of franchisee purchases. We are not contractually obligated to remit any payments to franchisees and reserve the righ
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–33)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, certain approved suppliers make payments to Benihana based on franchisee purchases. Some suppliers make payments on a per-unit basis, ranging from $0.50 to $5.50 per unit purchased. The specific amount depends on the supplier, the product, and the total unit volume purchased. Another supplier provides payments to Benihana in the form of rebates, amounting to 5.0% of net purchases.
During the fiscal year ending March 31, 2024, Benihana received $29,709.25 from these suppliers due to franchisee purchases. Benihana states that it remitted 100% of these payments to the franchisees. However, Benihana is not contractually obligated to continue this practice and reserves the right to retain all such payments in the future.
For a prospective franchisee, this means that while they may currently receive the benefit of these rebates or per-unit payments, there is no guarantee that this will continue. Benihana could change its policy and retain these payments, which could impact the franchisee's profitability. It is important for potential franchisees to consider this when evaluating the financial aspects of the franchise opportunity.