Who does Benihana typically designate as 'Controlling Principals'?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
As described in Item 1, we have identified certain persons under the Franchise Agreement that we refer to in this Disclosure Document as your Principals. Your Principals may include a spouse, if any Principal is a married individual. Your Principals as to a business entity include those officers and directors (including the officers and directors of your owners, if applicable) we designate as your Principals, all holders of an ownership interest in you and in any entity that directly or indirectly controls you, and any other person or entity controlling, controlled by, or under common control with you. If we designate certain of your Principals as Controlling Principals, they must sign the Agreement and agree to be individually bound by certain obligations under the Agreements, including confidentiality and non-competition covenants, and they must personally guarantee your performance under the Franchise Agreement. We typically designate your principal equity owners and executive officers, as well as any other affiliated entities that operate Restaurants, as Controlling Principals.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 57–58)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Controlling Principals are designated among the franchisee's Principals. Principals may include a spouse, officers, and directors. For business entities, Principals include officers and directors, holders of ownership interest, and any person or entity controlling the franchisee.
Benihana typically designates principal equity owners and executive officers as Controlling Principals. Additionally, any affiliated entities that operate Restaurants may also be designated as Controlling Principals.
Controlling Principals must sign the Franchise Agreement and agree to be individually bound by certain obligations, including confidentiality and non-competition covenants. They must also personally guarantee the franchisee's performance under the Franchise Agreement, ensuring a strong commitment to upholding the brand's standards and financial obligations.