Under what circumstances might jurisdictions impose mandatory closures on Benihana restaurants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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restaurants and the ability to adequately staff our restaurants, receive deliveries on a timely basis or perform functions at the corporate level. We also may be adversely affected if jurisdictions in which we have restaurants impose mandatory closures, seek voluntary closures or impose restrictions on operations. Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or significant health risk may adversely affect our business.
To the extent that a virus or disease is food-borne, or perceived to be food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause our customers to eat less of a product. For example, health concerns relating to the consumption of beef or to specific events such as the outbreak of "mad cow disease" may adversely impact sales of our beef-related menu items. In addition, public concern over "avian flu" may cause fear about the consumption of chicken, eggs and other products derived from poultry. The inability to serve beef or poultry-based products would restrict our ability to provide a variety of menu items to our customers. If we change our menu in response to such concerns, we may lose customers who do not prefer the new menu, and we may not be able to sufficiently attract new customers to produce the revenue needed to restore the profitability of our restaurant operations.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, jurisdictions may impose mandatory closures on Benihana restaurants in response to a virus or other disease outbreak. These mandatory closures, voluntary closures, or operational restrictions can significantly affect Benihana's business. Even if such measures are not implemented and a virus or other disease does not spread significantly, the perceived risk of infection or significant health risk may adversely affect Benihana's business.
Additionally, if a virus or disease is food-borne, or perceived to be food-borne, future outbreaks may adversely affect the price and availability of certain food products and cause Benihana's customers to eat less of a product. For example, health concerns relating to the consumption of beef or to specific events such as the outbreak of "mad cow disease" may adversely impact sales of beef-related menu items. Public concern over "avian flu" may cause fear about the consumption of chicken, eggs and other products derived from poultry.
Furthermore, adverse weather conditions or natural disasters such as fires and hurricanes can also lead to closures, repair and restoration costs, food spoilage, and other significant reopening costs, all of which would adversely affect Benihana's business. Shortages or delayed shipments at Benihana restaurants may occur if adverse weather or natural disasters affect the distribution network, which could adversely affect Benihana restaurants and the business as a whole. Periods of extreme temperatures (either hot or cold) or precipitation may result in a reduction in customer traffic, which could adversely affect Benihana restaurants and the business as a whole.