What were the COVID-19 related costs incurred by Benihana in 2021?

According to Benihana's 2024 Franchise Disclosure Document, the COVID-19 pandemic significantly impacted the company's business and financial results. In 2021, Benihana incurred $5.8 million in COVID-19 related expenses. These costs primarily covered sanitation, supplies, and safety precautions implemented to prevent the spread of the virus.

These expenses highlight the financial strain that the pandemic placed on Benihana, requiring them to invest heavily in measures to protect both employees and customers. For a prospective franchisee, this indicates the potential for unforeseen costs related to health crises or similar events that could necessitate significant operational adjustments and financial investments in safety measures.

The FDD also indicates that Benihana made operational changes to adhere to government requirements regarding safety and sanitation. However, Benihana acknowledges that there is no guarantee that these changes will be fully effective in preventing the spread of COVID-19. This uncertainty underscores the ongoing risk and potential for continued financial impact related to the pandemic, even with preventative measures in place.

Furthermore, the document notes that COVID-19 may affect customers' willingness to dine outside of their homes, which could adversely impact Benihana's business, financial condition, and results of operations. This highlights the interconnectedness of public health concerns and the restaurant industry, suggesting that franchisees need to be prepared for potential fluctuations in customer traffic and revenue due to external health-related factors.