What costs are included in Benihana's occupancy expenses?

According to Benihana's 2024 Franchise Disclosure Document, occupancy expenses encompass a range of costs associated with the restaurant's physical location. These include both fixed and variable rent, providing flexibility based on revenue or other factors. Additionally, occupancy costs incorporate deferred rent expense, which is a non-cash adjustment used in calculating Adjusted EBITDA.

Common area maintenance (CAM) charges are also part of occupancy expenses, covering the franchisee's share of maintaining shared spaces. Real estate property taxes, a significant expense for any physical location, are included as well. Utility costs, such as electricity, water, and gas, are essential for restaurant operations and are factored into occupancy expenses.

Finally, the definition includes "other related occupancy costs," which could encompass items like property insurance, landscaping, or security services directly tied to the restaurant's location. Benihana measures these occupancy costs by considering both the fixed and variable components of certain occupancy expenses, allowing for a comprehensive assessment of location-related expenses.