Under what conditions will Benihana agree not to unreasonably withhold consent to a Disposition?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
arantee Franchisee's obligations under this Agreement by signing a Personal Guaranty substantially in the form of Exhibit B hereto.
- 11.4 BNC agrees not to unreasonably withhold its consent to any Disposition provided: (a) BNC has not exercised its right of first refusal granted in Section 11.5; (b) all of Franchisee's monetary obligations to BNC have been satisfied in full; (c) Franchisee releases any and all claims it may have against BNC, agrees to remain obligated under the non-competition and non-disclosure of confidential information covenants contained herein, and expressly agrees to remain primarily liable under this Agreement after the transfer for a period of three (3) years (or for the period in which Franchisee receives payment from the Transferee, if longer than three years); (d) BNC is paid an assignment fee of $10,000; (e) the Transferee (i) meets BNC's then-current criteria for new Franchisees, (ii) executes a written agreement assuming all of the Franchisee's obligations under this Agreement and a duplicate original thereof is delivered to BNC, (iii) is of good moral character and reputation, (iv) has a General Manager (who need not be a principal of the Transferee) who has completed the training course then in effect for prospective Franchisees, and (v) has provided BNC with copies of all relevant corporate or partnership documents which shall, among other things, evidence the restrictions on transfer imposed by this Agreement. If any
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana agrees not to unreasonably withhold consent to a Disposition under specific conditions. These conditions include Benihana not having exercised its right of first refusal, the franchisee having satisfied all monetary obligations to Benihana, and the franchisee releasing all claims against Benihana.
Additionally, the franchisee must agree to remain obligated under non-competition and non-disclosure covenants and remain primarily liable under the agreement for three years, or for the period they receive payment from the transferee if longer. A $10,000 assignment fee must be paid to Benihana.
The transferee must meet Benihana's current criteria for new franchisees, execute an agreement assuming the franchisee's obligations, be of good moral character, have a general manager who has completed the required training, and provide all relevant corporate or partnership documents to Benihana. If these conditions are not met, Benihana has the right to refuse consent to the disposition.