Who specifically must the Benihana franchisee require to execute the restrictive covenant agreement?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.8 Franchisee shall require and obtain execution of a restrictive covenant agreement in the form attached to this Agreement as Exhibit F which includes covenants similar to those set forth in this Article 18 (including covenants applicable upon the termination of a person's relationship with Franchisee) from Franchisee's General Manager and any other personnel employed by Franchisee who has received or will receive training from BNC. Every covenant required by this Section 18.8 shall include a specific identification of BNC as a third party beneficiary of such covenants with the independent right to enforce them.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee must ensure that their General Manager and any other personnel who receive training from Benihana National Corporation (BNC) execute a restrictive covenant agreement. This agreement is in the form attached to the Franchise Agreement as Exhibit F.
The restrictive covenant includes stipulations similar to those outlined in Article 18 of the agreement, which also apply if a person's relationship with the franchisee ends. These covenants are designed to protect Benihana's trade secrets, confidential information, and overall business interests by preventing individuals with knowledge of the Benihana system from working for competitors or divulging sensitive information.
Benihana is explicitly identified as a third-party beneficiary in these agreements, granting them the independent right to enforce the covenants. The franchisee is required to provide Benihana with copies of all executed covenants within five days of hiring the General Manager or any other relevant employees. This ensures Benihana has a record of these agreements and can take action if any violations occur.