What costs are included within the 'Occupancy' expenses for Benihana's owned restaurants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Occupancy. Occupancy comprises all occupancy costs, consisting of both fixed and variable rent, deferred rent expense, which is a non-cash adjustment included in our Adjusted EBITDA calculation as defined below, common area maintenance charges, real estate property taxes, utilities and other related occupancy costs and is measured by considering both the fixed and variable components of certain occupancy expenses.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, occupancy expenses for owned restaurants encompass a range of costs associated with the physical space the restaurant occupies. These costs are factored as a percentage of the restaurant's net revenues.
The specific costs included within 'Occupancy' are fixed and variable rent, deferred rent expense, common area maintenance charges, real estate property taxes, utilities, and other related occupancy costs. Deferred rent expense is noted as a non-cash adjustment that is included in Benihana's Adjusted EBITDA calculation.
The document specifies that occupancy expenses are measured by considering both the fixed and variable components. This suggests that franchisees should anticipate fluctuations in these expenses based on factors like property taxes and utility consumption, in addition to consistent rent payments. Understanding these components is crucial for budgeting and financial forecasting.