What is the required action regarding operating the Benihana Restaurant at the specified location for the entire Franchise Term?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
ation"), using the Marks and the BENIHANA System solely in accordance with the BENIHANA Standards and the particular terms of this Agreement.
- 1.3 Unless sooner terminated in accordance with the provisions of this Agreement, this Agreement and the franchise and license granted hereunder shall be for a period ending 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.
- 1.3.1 Notwithstanding anything in Section 1.3 above, after the first five years of the Franchise Term, BNC will have the option, on ten (10) days' notice, to terminate the Franchise Agreement if average monthly sales for any prior six-month period are below $400,000.
- 1.4 The grant of this franchise does not grant, or imply the grant of, rights with regard to any other BENIHANA Restaurant at any other Location. Franchisee shall have no right whatsoever under this Agreement or otherwise to use, license, sublicense, or franchise others to use the Marks or the BENIHANA System. Franchisee acknowledges that Franchisee is not granted any options, rights of first refusal or development opportunities.
- 1.5 During the Franchise Term, if and only if Franchisee is in full compliance with the terms and conditions of this Agreement, and subject to BNC's rights set forth in Section 1.7 of this Agreement, BNC shall not operate or license any person or entity other than Franchisee to operate, a BENIHANA Restaurant at any location that is within the "Restaurant Area" specified in the Contract Data Sheet attached
to this Agreement.
- 1.6 Franchisee expressly acknowledges that the franchise granted under this Agreement is nonexclusive 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.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee must operate the Restaurant at the specified location for the entire Franchise Term, which is fifteen years from the date the Restaurant opens. Benihana also has the option to terminate the Franchise Agreement after the first five years with only ten days' notice if the average monthly sales fall below $400,000 for any six-month period. The franchisee cannot relocate the Restaurant without Benihana's prior written consent.
Benihana requires that the franchisee use the location solely for the operation of the Restaurant in strict accordance with the applicable Benihana Standards. The Restaurant must be open and in operation for the minimum hours and days specified or approved by Benihana in writing, and these hours may be changed by Benihana from time to time. The franchisee also needs to maintain the Restaurant in good condition and repair throughout the Franchise Term, which includes repainting and the repair or replacement of damaged items.
During the entire Franchise Term, the franchisee cannot conduct any other business activity at the Restaurant or location other than the operation of the Benihana Restaurant. The franchisee is also restricted from operating or granting concessions for vending machines, entertainment machines, or games without prior written consent from Benihana. These stipulations ensure that the franchisee focuses solely on the Benihana business and maintains the brand's integrity and standards at the designated location.