Risk Score
Pending analysis
Investment Range
$616,000 - $6,250,000
Franchise Fee
$40,000
Total US Locations
77
Business Summary
BENIHANA National Corp. offers franchises for BENIHANA Restaurants, which specialize in hibachi or teppanyaki-style Japanese cooking where chefs prepare food on a grill that is part of the dining table. BENIHANA Restaurants also typically serve sushi. Franchisees can operate either full-sized restaurants, offering casual dining with chef entertainment, or limited-menu Concession Model locations found in venues like stadiums.
Corporate History
Benihana National Corp. was formed as a Delaware corporation in December 1982. The company is the successor to a portion of the business previously run by Benihana of Tokyo, Inc. (BOT), which was established in 1963 and had operated BENIHANA Restaurants since then. In May 1995, Benihana National Corp. acquired 21 domestic BENIHANA OF TOKYO restaurants and most rights to the BENIHANA System in the continental United States, Central and South America, and the Caribbean from BOT. Following this Reorganization Agreement in May 1995, Benihana National Corp. began offering franchises. The company's stock was acquired by Safflower Holdings Corp. in August 2012, and then Safflower Holdings Corp. was acquired by TOG Kaizen Acquisition, LLC, a subsidiary of The ONE Group Hospitality, Inc., in May 2024. Benihana National Corp. currently operates 69 BENIHANA Restaurants in the United States and has licensed or franchised 11 others, in addition to 5 concession locations.
Financial Overview
Investment Range
$616,000 - $6,250,000
Franchise Fee (Low)
$40,000
Franchise Fee (High)
$40,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$361,000
Equipment Costs (High)
$5,200,000
Working Capital
$300,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The ONE Group Hospitality, Inc., which guarantees Benihana National Corp.'s obligations, appears to be in a stable financial position. As of December 31, 2022, the company had $55.1 million in cash and cash equivalents and $74.3 million in long-term debt. The company expects to meet its financing needs through cash from operations, construction allowances, and existing credit facilities, and reported compliance with debt covenants. The auditors issued an unqualified opinion on its financial statements for 2022 and 2021. COVID-19 related expenses were $2.5 million in 2022.
Financing Details
Benihana National Corp. does not offer any direct or indirect financing to franchisees. The franchisor also does not guarantee a franchisee's notes, leases, or any other monetary obligations.
Performance Metrics
Total US Locations
77
Franchised Units
8
Corporate Units
69
Avg Square Footage
7,000
Franchising Since
1995
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
5
Litigation Summary
Benihana National Corp. has disclosed five concluded litigation cases. These cases primarily involved disputes with Benihana of Tokyo, Inc. ("BOT") related to breach of contract and trademark rights. All these cases were filed between 2010 and 2016 and were concluded by early 2019. For example, one case in Florida, filed in 2011, alleged breach of contract and unfair trade practices against BOT, but it was voluntarily dismissed in 2017. Another series of cases in Delaware and New York involved trademark ownership and a Hawaii License Agreement dispute with BOT, which ultimately resulted in Benihana National Corp. being awarded attorney's fees and the termination of BOT's Hawaii license in 2018/2019. Benihana National Corp. currently has no ongoing litigation.
Bankruptcy History
Benihana National Corp. has no bankruptcy history to disclose.
Agreement Terms
Initial Term
15 years
Renewal Conditions
To renew, Benihana National Corp. franchisees must meet several conditions. These include not being in default (or having been in default within 24 months prior to expiration), remodeling or contracting to remodel the restaurant to reflect current brand image, submitting a written application for a Successor Franchise Agreement at least 365 days before the current term expires, and signing the then-current franchise agreement at least 30 days before expiration. Franchisees must also meet all current legal, financial, and operational standards applicable to new franchisees, submit all requested documentation, pay an administrative fee equal to 20% of the then-current Franchise Fee, sign a general release of all claims, and satisfy all monetary obligations owed to Benihana National Corp. and its affiliates.
Training & Support Program
Franchisor Assistance
Benihana National Corp. provides franchisees with several forms of assistance. Before opening, BENIHANA offers access to its operations manual, initial training programs, pre-opening and opening assistance for additional employees, and personnel consultation for the planning, design, construction, and build-out of the restaurant. Although Benihana National Corp. does not select the site, it must approve the location, considering various factors, and may assist in finding one. During operation, BENIHANA conducts visits and evaluations to ensure compliance with standards, and offers ongoing training for operations, chefs, general managers, and other restaurant personnel as deemed necessary. Additional in-restaurant training can be provided at the franchisee's request, for which the franchisee must pay a training fee and reimburse expenses. The franchisor also provides a point-of-sale (POS) system and requires participation in its online order platform, with franchisees responsible for upgrades.
Initial Training Hours
418
Training Location
Classroom training at Franchisor's office in Aventura, FL, and on-the-job training at a designated corporate or franchised restaurant.
Ongoing Support
Benihana National Corp. provides ongoing support through visits and evaluations of the restaurant as deemed necessary to ensure compliance with BENIHANA Standards. Franchisees also receive ongoing training regarding restaurant operations, chefs, general managers, and other restaurant personnel as deemed necessary by Benihana National Corp. and subject to its availability. Additional in-restaurant training can be provided at the franchisee's request, for which the franchisee must pay a training fee and reimburse expenses.
Franchise Requirements
Ideal Candidate Profile
Benihana National Corp. seeks franchisees who will employ a full-time General Manager responsible for the daily supervision and management of the BENIHANA Restaurant. This General Manager must meet the franchisor's educational and business criteria and be individually approved by Benihana National Corp. Franchisee principals are not required to personally manage the restaurant but must sign personal guarantees. Ideal candidates should possess management skill, experience, and business acumen.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Absentee Allowed
Territory Type
Limited
Territory Size Requirements
Benihana National Corp. grants a "Restaurant Area" territory that may range from a zero to three-mile radius from the franchisee's BENIHANA Restaurant, with the specific size depending on market circumstances.
Staffing Notes
Benihana National Corp. requires each BENIHANA Restaurant to have a designated full-time General Manager who is individually approved by the franchisor and meets their educational and business criteria, devoting full time and best efforts to supervision and management. Franchisees must also staff the restaurant with other personnel as needed, including key roles such as Chief Chef, Sushi Chef, and Chief Bartender for the Restaurant Model, and Cooks, Sushi Chef, and Cashiers for the Concession Model. All management personnel, including the General Manager and other trained staff, must sign confidentiality and non-competition covenants.