Regarding employees at a Benihana franchise, who is considered the sole and exclusive employer?

According to Benihana's 2024 Franchise Disclosure Document, a franchisee is considered the sole and exclusive employer of their employees. This means that the franchisee has the sole right to hire, discipline, and discharge employees. They are also responsible for establishing wages, hours, benefits, employment policies, and other terms and conditions of employment without needing approval or consultation from Benihana National Corp (BNC). BNC has no control over the employment terms and conditions of the franchisee's employees.

This arrangement is typical in franchising, as it allows the franchisee to manage their business and employees according to local market conditions and their own management style. However, Benihana franchisees must still ensure that their employment practices comply with all applicable local, state, and federal laws.

As the sole employer, the Benihana franchisee is responsible for all aspects of employment, including training, compliance, and any potential liabilities related to their employees. This includes ensuring that employees adhere to confidentiality and restrictive covenants, especially regarding the Benihana system and confidential information. Franchisees must also designate a General Manager who will devote their full time and best efforts to the supervision and management of the Restaurant.