Does Benihana require franchisees to acknowledge that their success will be largely dependent on their ability as an independent businessperson?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 16. INDEPENDENT CONTRACTOR
- 16.1 Franchisee acknowledges and agrees it is an independent contractor and is not an agent, partner, joint venturer, joint employer, or employee of BNC or any BNC affiliate, and no fiduciary relationship exists between the parties.
- 16.2 Franchisee will be the sole and exclusive employer of its employees, with the sole right to hire, discipline, discharge and establish wages, hours, benefits, employment policies, and other terms and conditions of employment for its employees without consultation or approval from
- BNC. BNC will have no control over the terms and conditions of employment of Franchisee's employees.
- 16.3 Franchisee will have no right to bind or obligate BNC, Benihana, Inc., or Benihana of Tokyo in any way; nor may Franchisee represent that it has any right to do so.
- 16.4 In all public records and in Franchisee's relationships with other persons, including on stationery, business forms, and checks, Franchisee will indicate independent ownership of the Restaurant and that Franchisee operates the Restaurant under a franchise license granted by BNC.
- 16.5 Franchisee must exhibit at the franchised Restaurant, in such places as may be designated by BNC, a notification that the Restaurant is operated by Franchisee as an independent contractor and not by BNC, Benihana, Inc., or Benihana of Tokyo.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, franchisees acknowledge their status as independent contractors. Benihana states that franchisees are not agents, partners, joint ventures, joint employers, or employees of Benihana or any of its affiliates. This distinction carries significant implications for the franchisee's operational control and financial responsibilities.
As an independent contractor, the Benihana franchisee has the sole authority to manage their employees, including hiring, disciplining, discharging, and setting wages, hours, benefits, and employment policies, without needing approval from Benihana. The franchisee also acknowledges that they cannot bind or obligate Benihana in any way. This independence extends to how the franchisee presents their business to the public, requiring them to indicate independent ownership of the restaurant on all public records, stationery, business forms, and checks.
Furthermore, Benihana requires franchisees to display a notification at the restaurant stating that it is operated by the franchisee as an independent contractor and not by Benihana. These stipulations reinforce the understanding that the franchisee's success is tied to their own business acumen and operational effectiveness. While Benihana provides the brand, system, and training, the franchisee is ultimately responsible for the day-to-day management and profitability of their location.