What were the COVID-19 related expenses for Benihana in 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
under dispute with landlords.
Agreement restructuring. Agreement restructuring expense for both 2021 and 2020 was $0.5 million, related to the restructuring of agreements with our management and license partners. We do not expe
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, COVID-19 related expenses for the company totaled $5.5 million in 2020. These expenses primarily covered sanitation, supplies, and safety precautions implemented to prevent the spread of COVID-19.
For a prospective Benihana franchisee, this figure highlights the significant financial impact that the pandemic had on the company. It demonstrates the types of costs franchisees might incur during similar widespread health crises, particularly in maintaining a safe environment for both customers and employees. These costs are in addition to potential revenue losses from reduced customer traffic or operational restrictions.
The FDD also indicates that Benihana incurred $5.8 million in COVID-19 related expenses in 2021 and $2.5 million in 2022, suggesting that these costs can persist over multiple years. This sustained level of expenditure underscores the importance of having robust contingency plans and financial reserves to manage unforeseen events such as pandemics. Franchisees should consider these factors when assessing the financial viability of a Benihana franchise and planning for potential future disruptions.