Where on Benihana's consolidated balance sheets is the Konavore rewards program included?

According to Benihana's 2024 Franchise Disclosure Document, the Konavore rewards program is included in accrued expenses on the consolidated balance sheets. This means that the financial obligations Benihana has accrued related to the rewards program, such as points earned by customers but not yet redeemed, are recorded as liabilities under accrued expenses. This is a standard accounting practice, as it reflects the company's obligation to provide future discounts or rewards to customers based on their participation in the loyalty program.

For a prospective Benihana franchisee, understanding where the Konavore rewards program is accounted for on the balance sheet is important for assessing the company's financial health and potential liabilities. Accrued expenses represent short-term liabilities that Benihana is expected to settle within a year. The amount allocated to the Konavore program reflects the estimated cost of future redemptions, which can impact the franchisee's profitability and cash flow.

Specifically, as of December 31, 2022 and 2021, the deferred revenue allocated to loyalty points that have not been redeemed was $0.2 million and $0.1 million, respectively. This deferred revenue is recorded as a component of accrued expenses in the accompanying consolidated balance sheets. Benihana expects the loyalty points to be redeemed and recognized over a one-year period. This gives potential franchisees insight into the scale of the loyalty program's financial impact and the timeframe over which these obligations are expected to be fulfilled.