Does Benihana state that any violation of Anti-Terrorism Laws by the franchisee's employees is grounds for immediate termination?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 21.8 Franchisee must comply with, and assist to the fullest extent possible BNC's efforts to comply with, the Anti-Terrorism Laws (as defined below). Franchisee will not hire or otherwise deal with any person listed on the SDN List, as it may be modified from time to time. Franchisee is solely responsible for determining actions Franchisee must take to comply with all Anti-Terrorism Laws. Franchisee specifically acknowledges and agrees that Franchisee's indemnification obligations under this Agreement apply to Franchisee's obligations under Section 21.7 and this Section 21.8. Any misrepresentation by Franchisee under this Section 21.8, or any violation of any Anti-Terrorism Laws by Franchisee, Franchisee's owners, principals or employees, will constitute grounds for immediate termination without opportunity to cure of this Agreement and any other agreement between Franchisee and BNC or BNC's affiliates.
- 21.9 As used herein, "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT ACT, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any Governmental Authority (including, without limitation, The United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Source: Item 23 — Receipts (FDD pages 74–576)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a violation of Anti-Terrorism Laws by a franchisee's employees can lead to immediate termination of the Franchise Agreement. Benihana requires franchisees to comply with Anti-Terrorism Laws and assist Benihana in its compliance efforts. Franchisees are prohibited from hiring or dealing with individuals or entities listed on the SDN (Specially Designated Nationals) List. Franchisees are solely responsible for understanding and adhering to all relevant Anti-Terrorism Laws.
The Franchise Agreement specifies that any misrepresentation by the franchisee regarding compliance with Anti-Terrorism Laws, or any violation of these laws by the franchisee, their owners, principals, or employees, constitutes grounds for immediate termination of the agreement. This termination can occur without any opportunity for the franchisee to correct the violation. This condition extends not only to the Franchise Agreement itself but also to any other agreements between the franchisee and Benihana or its affiliates.
Anti-Terrorism Laws are defined broadly in the Franchise Agreement to include Executive Order 13224, the Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, the Cuban Assets Control Regulations, the USA PATRIOT ACT, and all other present and future federal, state, and local laws, ordinances, regulations, policies, and requirements related to terrorist acts and acts of war. This definition also encompasses requirements from any Governmental Authority, including the United States Department of Treasury Office of Foreign Assets Control.
This requirement places a significant responsibility on Benihana franchisees to ensure thorough screening and compliance measures are in place for all employees. The immediate termination clause underscores the critical importance Benihana places on adhering to Anti-Terrorism Laws and maintaining a secure and compliant business operation. Prospective franchisees should carefully review and understand these obligations and ensure they have the resources and systems in place to meet these requirements.