Does Benihana require franchisees to acknowledge they have read and understood the attachments to the franchise agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1. GRANT OF FRANCHISE AND FRANCHISE TERM
- 1.1 The INTRODUCTION paragraphs set forth above are hereby incorporated in this Article 1 by reference as if set forth fully herein.
- 1.2 BNC grants to Franchisee, and Franchisee accepts, a non-exclusive franchise license to operate a single BENIHANA Restaurant (the "Restaurant") at the specific location approved by BNC and identified in the Contract Data Sheet attached as Exhibit A hereto (the "Location"), using the Marks and the BENIHANA System in accordance with the BENIHANA Standards and the terms of this Agreement. Franchisee expressly acknowledges that the franchise license granted under this Agreement is non-exclusive and that any geographic limitation on BNC's rights to use or license the Marks under this Agreement relates solely to the operation of a BENIHANA Restaurant at the Location.
- 1.3 Unless sooner terminated under with the provisions of this Agreement, the franchise license granted to Franchisee will begin on the Effective Date set forth in the Contract Data Sheet and end fifteen (15) years from the date the Restaurant opens for business to the public (the
"Franchise Term"). Franchisee agrees to operate the Restaurant in accordance with this Agreement at the Location for the entire Franchise Term.
- 1.4 The grant of a franchise license under this Agreement is specifically limited to operating the Restaurant at the Location, and it does not grant, or imply the grant of, rights regarding any other BENIHANA Restaurant at any other location.
Other than with respect to the Restaurant at the Location, Franchisee has no right under this Agreement or otherwise to use, license, sublicense, or franchise others to use the Marks or the BENIHANA System, and Franchisee is not granted any options, rights of first refusal or development opportunities.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
Based on the 2024 Benihana Franchise Disclosure Document, the franchise agreement includes several acknowledgements by the franchisee. Specifically, Article 1.1 states that the introductory paragraphs are incorporated by reference into Article 1, indicating the franchisee agrees to the content of those paragraphs. Additionally, Article 3.2 requires the franchisee to acknowledge that compliance with the Benihana System, Standards, and Operations Manual is necessary to promote goodwill.
Furthermore, Article 18.1 requires the franchisee to acknowledge they will receive valuable training and access to confidential information that provides a competitive advantage. This acknowledgement is part of the agreement to protect Benihana's business interests and those of other franchisees, as stated in Article 18.2. These acknowledgements suggest that franchisees are expected to understand the terms and conditions outlined in the franchise agreement and its incorporated documents.
While the excerpts highlight several acknowledgements related to specific aspects of the franchise agreement, they do not explicitly state that franchisees must acknowledge they have read and understood all attachments to the franchise agreement. A prospective franchisee should confirm with Benihana whether a general acknowledgement of having read and understood all attachments is required as part of the agreement.