What was the Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. for Benihana in 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
spitality, | | | | | Inc. | | |
(1) These expenses are being shown as a percentage of owned restaurant net revenue.
The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):
| For the year ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Net income (loss) attributable to The ONE Group Hospitality, Inc. | $ | 31,348 | $ | (12,825) |
| Net income (loss) attributable to noncontrolling interest | 600 | (798) | ||
| Net income (loss) | 31,948 | (13,623) | ||
| Interest expense, net of interest income | 3,780 | 5,329 | ||
| Provision (benefit) for income taxes | 1,586 | (5,400) | ||
| Depreciation and amortization | 10,790 | 10,114 | ||
| EBITDA | 48,104 | (3,580) | ||
| COVID-19 related expenses | 5,821 | 5,492 | ||
| Transaction costs (1) | 160 | 1,109 | ||
| Stock-based compensation | 3,618 | 1,773 | ||
| Lease termination expense (2) | 1,912 | 3,315 | ||
| Agreement restructuring expense | 503 | 452 | ||
| Pre-opening expenses | 1,037 | 178 | ||
| Non-cash rent (3) | (32) | 300 | ||
| Gain on CARES Act L |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the Adjusted EBITDA attributable to The ONE Group Hospitality, Inc. for the year ended December 31, 2021, was $42,687. This figure represents the earnings available to the parent company after accounting for various adjustments to EBITDA, providing a clearer picture of the company's operational profitability.
For a prospective Benihana franchisee, understanding Adjusted EBITDA is crucial as it reflects the financial health and performance of the overall organization. A higher Adjusted EBITDA suggests a more profitable and stable business, which can translate to better support, resources, and brand recognition for franchisees. Conversely, a lower or declining Adjusted EBITDA might indicate financial challenges that could impact the franchisor's ability to support its franchisees.
It's important to note that while this figure provides insight into the franchisor's financial performance, it does not directly represent the potential earnings of an individual Benihana franchise. A prospective franchisee should also review the financial performance representations (FPR) in Item 19 of the FDD, which provides information on the actual or potential revenues, expenses, and profits of existing franchise locations. Additionally, speaking with current Benihana franchisees can offer valuable insights into their experiences and the financial realities of operating a franchise.
Franchisees should also consider the various adjustments made to calculate Adjusted EBITDA, such as COVID-19 related expenses, transaction costs, stock-based compensation, and other non-recurring items. These adjustments can provide a more accurate understanding of the company's underlying operational performance and help franchisees assess the long-term viability of the franchise opportunity.