Who has the right to retrieve data and information directly from a Benihana franchisee's POS System?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
All books and records relating to operation of the Restaurant shall be maintained at the Restaurant or, with BNC's prior written consent, at Franchisee's main offices.
- 8.5 BNC or its authorized representative at all reasonable times shall have the right to inspect, audit, photocopy and/or examine all of Franchisee's books, records and tax returns, including without limitation, Franchisee's general ledger, its balance sheets, its profit and loss statements and its stockholder's registry book.
BNC shall also have the right, at any time, to have an independent audit made of Franchisee's books and records.
If any inspection, review or audit reveals that Franchisee understated any payments in any report submitted to BNC, then BNC shall have the right to immediately debit from Franchisee's bank account or require Franchisee to immediately pay the amount understated to BNC, as well as interest from the date such amount was due until debited or paid, at the rate of 18% per annum, or the maximum rate permitted b
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana or its authorized representative has the right to inspect, audit, photocopy, and examine all of the franchisee's books, records, and tax returns at all reasonable times. This includes the franchisee's general ledger, balance sheets, profit and loss statements, and stockholder's registry book. Benihana also has the right to have an independent audit made of the franchisee's books and records at any time.
This means that Benihana has broad access to a franchisee's financial and operational data. The franchisee must maintain all books and records relating to the operation of the restaurant at the restaurant location or, with Benihana's prior written consent, at the franchisee's main offices.
If an inspection, review, or audit reveals that the franchisee understated any payments in any report submitted to Benihana, Benihana has the right to immediately debit the amount understated from the franchisee's bank account or require the franchisee to immediately pay the amount understated. Benihana can also charge interest on the understated amount from the date it was due until it is debited or paid, at a rate of 18% per annum, or the maximum rate permitted by law, whichever is less. This underscores the importance of accurate reporting and record-keeping for Benihana franchisees.