Can Benihana reduce the scope of the non-compete covenants without the franchisee's consent?

According to Benihana's 2024 Franchise Disclosure Document, Benihana has the right to reduce the scope of any covenant set forth in Section 18.4, or any portion thereof, without the franchisee's consent. This becomes effective immediately upon the franchisee's receipt of written notice. The franchisee must then comply with the modified covenant.

This clause provides Benihana with considerable flexibility to adjust the non-compete terms as they see fit. For a potential franchisee, this means the non-compete agreement could become less restrictive during the franchise term. However, it is important to note that Benihana is not obligated to make these changes, and the franchisee has no control over whether or not the scope of the non-compete is reduced.

Franchisees should be aware that while Benihana can reduce the scope of the non-compete, the FDD does not state that Benihana can expand the scope of the non-compete without the franchisee's consent. The franchisee is obligated to comply with any modifications Benihana makes to the non-compete agreement as long as they receive written notice. This clause is designed to protect Benihana's business interests and the interests of other franchisees within the Benihana system.