Is the accounting firm auditing Benihana required to be independent?

According to Benihana's 2024 Franchise Disclosure Document, the accounting firm auditing The ONE Group Hospitality, Inc., which is Benihana's parent company, must be independent. The FDD states that the accounting firm is required to be independent with respect to the company in accordance with U.S. federal securities laws and the rules and regulations of the Securities and Exchange Commission and the PCAOB (Public Company Accounting Oversight Board). This requirement ensures that the audit is objective and unbiased.

This independence is crucial for maintaining the integrity and credibility of the financial statements. It means the accounting firm cannot have any financial, employment, or personal ties to the company that could compromise their judgment. The audit is conducted in accordance with the standards of the PCAOB, which requires the firm to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

For a potential Benihana franchisee, this indicates that the financial information provided by Benihana has been reviewed by an independent and qualified accounting firm. This can provide a level of comfort and assurance regarding the accuracy and reliability of the financial data presented in the FDD. It's a standard practice for publicly traded companies like The ONE Group Hospitality, Inc. to have their financial statements audited by an independent firm to comply with regulatory requirements and maintain investor confidence.