What specific changes must a franchisee make to the location and restaurant after termination or expiration of the Benihana franchise agreement to distinguish it from other Benihana restaurants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- (e) Franchisee shall immediately make or cause to be made such modifications and alterations to the Location and the Restaurant to distinguish the appearance of the Location and Restaurant from other BENIHANA Restaurants and shall make such specific additional changes thereto as BNC may request for that purpose.
If Franchisee fails or refuses to comply with the requirements of this Section 14.1 (e), in addition to any other rights BNC has under this Agreement, BNC shall have the right to enter upon the premises where the Restaurant was operated, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at Franchisee's expense, which expense Franchisee agrees to pay upon demand.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee must modify and alter the location and restaurant to differentiate its appearance from other Benihana restaurants. These changes must be made immediately. Benihana has the right to request specific additional changes for this purpose.
If the franchisee fails to make these required changes, Benihana has the right to enter the premises and make the changes themselves at the franchisee's expense. The franchisee is obligated to pay these expenses upon demand. This ensures that the location no longer resembles a Benihana restaurant and does not infringe on Benihana's brand or trade dress.
This requirement is typical in franchising to protect the brand's image and prevent customer confusion after a franchise agreement ends. It prevents a former franchisee from trading on Benihana's goodwill after the agreement is over. Prospective franchisees should be aware of these obligations, as they could involve significant costs to remodel or alter the location after the franchise term.