Does Benihana state that any violation of Anti-Terrorism Laws by the franchisee's owners 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.
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 the franchisee, its owners, principals, or employees constitutes grounds for immediate termination of the Franchise Agreement. Benihana does not provide an opportunity to cure this type of violation.
Benihana requires franchisees to comply with all Anti-Terrorism Laws and to assist Benihana in its compliance efforts. Franchisees must not hire or conduct business with anyone on the SDN List, which is subject to change. The franchisee bears the sole responsibility for ensuring compliance with all Anti-Terrorism Laws.
This requirement means that prospective Benihana franchisees must conduct thorough due diligence to ensure that they, their owners, principals, and employees are not in violation of any Anti-Terrorism Laws. Failure to do so could result in the immediate termination of the franchise agreement and the loss of their investment.