What was the amount of Benihana's retained earnings at December 31, 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
inancial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Plante & Moran PLLC
We served as the Company's auditor from 2018 to 2021.
Boulder, Colorado
March 19, 2021
F-4
THE ONE GROUP HOSPITALITY, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share information)
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 23,614 | $ 24,385 |
| Accounts receivable | 11,356 | 5,777 |
| Inventory | 3,915 | 2,490 |
| Other current assets | 3,666 | 1,348 |
| Due from related parties | 376 | 376 |
| Total current assets | 42,927 | 34,376 |
| Property and equipment, net | 69,638 | 67,344 |
| Operating lease right-of-use assets | 85,395 | 80,960 |
| Deferred tax assets, net | 12,313 | 13,226 |
| Intangibles, net | 15,505 | 16,313 |
| Other assets | 3,199 | 2,446 |
| Security deposits | 858 | 904 |
| Total assets | $ 229,835 | $ 215,569 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 11,094 | $ 7,404 |
| Accrued expenses | 23,155 | 15,684 |
| Deferred license revenue | 90 | 207 |
| Deferred gift card revenue and other | 2,029 | 1,990 |
| Current portion of operating lease liabilities | 5,396 | 4,817 |
| Current portion of CARES Act Loans | — | 10,057 |
| Current portion of long-term debt | 500 | 588 |
| Total current liabilities | 42,264 | 40,747 |
| Deferred license revenue, long-term | 298 | 953 |
| Operating lease liabilities, net of current portion | 103,616 | 98,569 |
| CARES Act Loans, net of current portion | — | 8,257 |
| Long-term debt, net of current portion | 23,132 | 45,064 |
| Total liabilities | 169,310 | 193,590 |
| Commitments and contingencies (Note 15) | ||
| Stockholders' equity: | ||
| Common stock, $0.0001 par value, 75,000,000 shares authorized; 32,138,396 issued | ||
| and 32,125,762 outstanding at December 31, 2021 and 29,083,183 shares issued and | ||
| outstanding at December 31, 2020 | 3 | 3 |
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued | ||
| and outstanding at December 31, 2021 and December 31, 2020, respectively | — | — |
| Treasury stock, 12,634 shares and 0 shares at December 31, 2021 and December 31, | ||
| 2020, respectively | (37) | — |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company had retained earnings (accumulated deficit) of $(20,716) at December 31, 2020. This means that, instead of having a surplus of earnings, Benihana had an accumulated deficit of $20,716.
For a prospective franchisee, this figure provides a snapshot of the company's financial health at that specific point in time. Retained earnings represent the cumulative net income or loss of a company over its entire history, less any dividends paid out to shareholders. A negative retained earnings balance, or accumulated deficit, suggests that the company has experienced losses that exceed its profits over time.
It's important to note that this is just one data point and doesn't necessarily indicate long-term financial instability. However, a prospective Benihana franchisee should investigate further to understand the reasons behind the deficit and whether the company has a plan to address it. Reviewing subsequent financial statements to see if the deficit has been reduced or eliminated would be a prudent step in assessing the financial trajectory of the company.