Besides cash from operations and construction allowances, what other methods might Benihana use to finance its operations and expansion?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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performance, which, if significantly adversely affected, would adversely affect the availability of funds, we expect to finance our operations for at least the next 12 months, including the costs of opening currently planned new restaurants, through cash provided by operations and construction allowances provided by landlords of certain locations. We also may borrow on our revolving credit facility or issue equity to support ongoing business and fund additional expansion. We believe the combination of the aforementioned items are adequate to support our immediate business operations and plans. As of December 31,
2021, we had cash and cash equivalents of $23.6 million.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana anticipates funding its operations, including the costs of opening new restaurants, through cash from operations and construction allowances from landlords. However, the company may also utilize additional financial tools to support its business.
Specifically, Benihana has the option to borrow funds from its revolving credit facility. As of December 31, 2021, the availability on their revolving credit facility was $10.6 million, although this is subject to certain restrictions outlined in their consolidated financial statements. Additionally, Benihana may choose to issue equity to generate capital for ongoing business activities and to fund further expansion initiatives.
Benihana believes that the combination of cash from operations, construction allowances, borrowing from their credit facility, and potential equity issuance will adequately support their immediate business operations and future plans. As of December 31, 2021, Benihana had $23.6 million in cash and cash equivalents and $24.8 million in long-term debt, reflecting their existing financial structure.