Does Benihana have the right to advertise and promote the Benihana System within the Restaurant Area of my Benihana franchise?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
m of your Franchise Agreement.
We and our affiliates have the right to: (i) own and operate, or license others the right to own and operate, competing restaurants other than a BENIHANA Restaurant at any location, regardless of the proximity to your Restaurant, including but not limited to restaurants using the trademarks RA SUSHI and HARU; (ii) own and operate, or license others the right to own and operate, BENIHANA Restaurants outside the Restaurant Area, even if these BENIHANA Restaurants might compete with the Restaurant or draw customers from the Restaurant Area; (iii) engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and/or sale of any product or service under the Marks, or other marks, anywhere, regardless of the proximity to, or the competitive impact on, your Restaurant, through alternative channels of distribution (by way of example only, grocery stores, conveniences stores, internet sales, catalog sales, telemarketing, or other direct marketing); (iv) license others to use the BENIHANA System and the Marks for the operation of BENIHANA Restaurants within Special Distribution Opportunities (as defined below); (v) advertise and promote the BENIHANA System within the Restaurant Area; and (vi) purchase, acquire, be acquired by, merge or affiliate with, or engage in any transaction with other businesses (whether or not these businesses are competitive with the Restaurant), including competing franchise systems with units operating in the Restaurant Area, and to convert and operate, or license others the right to operate, these units under the Marks and the BENIHANA System.
Source: Item 12 — TERRITORY (FDD pages 47–49)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana retains the right to advertise and promote the Benihana System within a franchisee's Restaurant Area. This means that even within the specific geographic area granted to a franchisee, Benihana can still conduct its own advertising and promotional activities to boost the brand's overall presence.
This has several implications for prospective franchisees. While franchisees are granted a defined Restaurant Area, they should be aware that Benihana's own marketing efforts within that area are beyond their control. Benihana is not required to compensate franchisees for exercising this right. This could potentially impact a franchisee's business if Benihana's advertising strategies don't align with their expectations or if the franchisee feels that Benihana's promotions are not benefiting their specific location.
It is common in franchising for franchisors to retain control over brand-level advertising and marketing to ensure consistency and brand recognition. However, franchisees should carefully consider how this might affect their local marketing strategies and discuss any concerns with Benihana before signing the franchise agreement. Understanding the scope and nature of Benihana's advertising plans for the Restaurant Area is crucial for franchisees to effectively plan their own local marketing efforts and manage their business expectations.