Under the Benihana agreement, do the franchisee's indemnification obligations apply to obligations under Section 21.7 and 21.8?
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, the franchisee's indemnification obligations specifically apply to their obligations under Sections 21.7 and 21.8 of the franchise agreement. Section 21.8 requires the franchisee to comply with and assist Benihana in complying with Anti-Terrorism Laws, and not to hire or deal with anyone on the SDN List.
This means that the franchisee is responsible for any costs, losses, or damages Benihana incurs as a result of the franchisee's failure to comply with these sections. This includes legal fees, fines, and other expenses. Furthermore, any misrepresentation or violation of Anti-Terrorism Laws by the franchisee or their personnel constitutes grounds for immediate termination of the agreement without an opportunity to cure.
This clause highlights the importance of franchisees adhering to all Anti-Terrorism Laws and regulations. Prospective franchisees should carefully review these sections and ensure they have systems in place to comply with these laws. The risk of immediate termination and the financial burden of indemnification make this a critical aspect of the Benihana franchise agreement.