factual

Does Benihana require franchisees to warrant that none of their owners are on the SDN list?

Benihana Franchise · 2024 FDD

Answer from 2024 FDD Document

on or entity otherwise the target of U.S. economic sanctions or trade embargoes enforced and administered by OFAC, such that a U.S. person or entity cannot deal or otherwise engage in

business transactions with Franchisee or Franchisee's shareholders, members or partners; (iii) wholly or partly owned or controlled by any person or entity on the SDN List, including, without limitation by virtue of such person being a director or owning voting shares or interests in an entity on the SDN List; (iv) a person or entity acting, directly or indirectly, for or on behalf of any person or entity on the SDN List; or (v) a person or entity acting, directly or indirectly, for or on behalf of a foreign government that is the target of the OFAC sanctions regulations such that the entry into this Agreement would be prohibited under U.S. law.

  • 21.8 Franchisee must comply with, and assist to the fullest extent possible BNC's efforts to comply with, the Anti-Terrorism Laws (as defined below). Franchisee will not hire or otherwise deal with any person listed on the SDN List, as it may be modified from time to time. Franchisee is solely responsible for determining actions Franchisee must take to comply with all Anti-Terrorism Laws. Franchisee specifically acknowledges and agrees that Franchisee's indemnification obligations under this Agreement apply to Franchisee's obligations under Section 21.7 and this Section 21.8. Any misrepresentation by Franchisee under this Section 21.8, or any violation of any Anti-Terrorism Laws by Franchisee, Franchisee's owners, principals or employees, will constitute grounds for immediate termination without opportunity to cure of this Agreement and any other agreement between Franchisee and BNC or BNC's affiliates.
  • 21.9 As used herein, "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.

Source: Item 23 — Receipts (FDD pages 74–576)

What This Means (2024 FDD)

According to Benihana's 2024 Franchise Disclosure Document, franchisees must comply with anti-terrorism laws and ensure they do not associate with individuals or entities on the SDN (Specially Designated Nationals) List. Benihana franchisees cannot hire or conduct business with anyone on the SDN List, which is updated periodically. The franchisee bears the responsibility for determining the necessary actions to comply with all anti-terrorism laws.

Benihana holds franchisees accountable for any misrepresentation regarding compliance with these regulations. If a franchisee, their owners, principals, or employees violate any anti-terrorism laws, it constitutes grounds for immediate termination of the franchise agreement without any opportunity to rectify the situation.

Furthermore, Benihana outlines specific criteria that would prohibit entering into a franchise agreement. These include if the franchisee has business transactions with individuals or entities on the SDN List, is partly or wholly owned or controlled by someone on the SDN List, acts on behalf of anyone on the SDN List, or acts on behalf of a foreign government targeted by OFAC sanctions, making the agreement illegal under U.S. law. This indicates that Benihana takes significant measures to ensure compliance with anti-terrorism laws and regulations, emphasizing the importance of franchisees and their associates not being affiliated with prohibited individuals or entities.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.