What was the approximate interest expense for Benihana's debt arrangements, excluding amortization of debt issuance costs and other discounts and fees, for the year ended December 31, 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, 2021 | December 31, 2020 | |
|---|---|---|
| Term loan agreements | $ 24,750 | $ 47,400 |
| Revolving credit facility | — | — |
| Equipment financing agreements | — | 108 |
| Total long-term debt | 24,750 | 47,508 |
| Less: current portion of long-term debt | (500) | (588) |
| Less: debt issuance costs | (1,118) | (1,856) |
| Total long-term debt, net of current portion | $ 23,132 | $ 45,064 |
| Future minimum loan payments: |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the interest expense for the company's debt arrangements, excluding amortization of debt issuance costs and other discounts and fees, was approximately $4.4 million for the year ended December 31, 2020. For the year ended December 31, 2021, the interest expense was approximately $3.3 million.
This figure represents the cost Benihana incurred to service its debt obligations during that fiscal year. It excludes non-cash items like amortization of debt issuance costs, providing a clearer picture of the actual cash outflow for interest payments. This information can be useful for prospective franchisees to understand Benihana's financial management and capital structure.
It is important to note that this interest expense is specific to Benihana's corporate debt and does not directly reflect the financing terms a new franchisee might encounter when securing funding to open their own Benihana restaurant. However, understanding the financial health and debt management of the parent company can offer insights into the overall stability of the franchise system.