What specific viruses or diseases are mentioned as potential threats to Benihana's operations?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses, such as coronavirus, norovirus, Avian Flu or "SARS," H1N1 or "swine flu," or other diseases such as bovine spongiform encephalopathy, commonly known as "mad cow disease." If a virus is transmitted by human contact, our employees or customers may become infected, or may choose, or be advised, to avoid gathering in public places, any of which may adversely affect the guest traffic at our restaurants and the ability to adequately staff our restaurants, receive deliveries on a timely basis or perform functions at the corporate level. We also may be adversely affected if jurisdictions in which we have restaurants impose mandatory closures, seek voluntary closures or impose restrictions on operations. Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or significant health risk may adversely affect our business.
To the extent that a virus or disease is food-borne, or perceived to be food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause our customers to eat less of such products. For example, health concerns relating to the consumption of beef or to specific events such as the outbreak of "mad cow disease" may adversely impact sales of our beef-related menu items. In addition, public concern over "avian flu" may cause fear about the consumption of chicken, eggs and other products derived from poultry. The inability to serve beef or poultry-based products would restrict our ability to provide a variety of menu items to our customers. If we change our menu in response to such concerns, we may lose customers who do not prefer the new menu, and we may not be able to sufficiently attract new customers to produce the revenue needed to restore the profitability of our restaurant operations. We also may generate different or additional competitors for our intended customers as a result of such a menu change and may not be able to successfully compete against such competitors.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, several viruses and diseases could severely affect their business. These include coronavirus, norovirus, Avian Flu or "SARS," H1N1 or "swine flu," and bovine spongiform encephalopathy, commonly known as "mad cow disease." These health concerns can impact Benihana in multiple ways. If these viruses are transmitted by human contact, employees or customers may become infected, or people might avoid public places, which could reduce guest traffic. This could also affect the ability to adequately staff restaurants or receive timely deliveries.
Furthermore, jurisdictions where Benihana restaurants are located might impose mandatory closures or operational restrictions, which would negatively impact the business. Even if such measures aren't implemented, the perceived risk of infection could still deter customers. If a virus or disease is food-borne, it could affect the price and availability of certain food products, causing customers to consume less of those products.
For example, concerns about "mad cow disease" could decrease sales of beef-related menu items, while fears about "avian flu" could reduce consumption of chicken and eggs. The inability to serve beef or poultry-based products would limit Benihana's menu options. If Benihana changes its menu in response to these concerns, it risks losing customers who prefer the original menu and may struggle to attract new customers to restore profitability. Additionally, menu changes could lead to new competitors, making it harder for Benihana to compete effectively.