Under what circumstances could Goldman Sachs sell Benihana's trademarks?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Each of our intellectual property marks is pledged as collateral securing our credit and guaranty agreement with Goldman Sachs Bank USA ("Goldman Sachs"). Default under these agreements could enable Goldman Sachs to sell (at auction or otherwise) our trademarks, which would have a material adverse effect on our ability to continue our business.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company's intellectual property marks, including trademarks, are pledged as collateral for their credit and guaranty agreement with Goldman Sachs Bank USA. This arrangement has a significant implication for prospective Benihana franchisees.
Specifically, if Benihana defaults on its credit and guaranty agreement with Goldman Sachs, Goldman Sachs has the right to sell the trademarks. This sale could occur through an auction or other means.
This situation presents a considerable risk. If Goldman Sachs were to sell Benihana's trademarks due to a default, it could severely disrupt Benihana's ability to continue its business. For a franchisee, this could mean a loss of brand recognition and the inability to operate under the Benihana name, potentially leading to significant financial losses.