What were the COVID-19 related expenses for Benihana in 2021?
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, the company incurred $5.8 million in COVID-19 related expenses during 2021. These expenses primarily covered sanitation, supplies, and safety precautions implemented to prevent the spread of COVID-19. This figure is part of the operating loss for the Corporate segment for the year ended December 31, 2021.
For a prospective franchisee, understanding these costs is crucial as it highlights the financial impact of health crises on restaurant operations. While the worst of the pandemic may be over, the potential for future health-related disruptions remains a factor in the restaurant industry. Franchisees should consider how such events could affect their operating costs and revenue streams.
It's also worth noting that Benihana took significant steps to adapt its business during the pandemic, aiming to increase sales while maintaining a safe environment for guests and employees. This proactive approach may have contributed to the company's ability to manage and mitigate some of the financial impacts of the pandemic. The FDD also indicates that in 2022, these expenses decreased to $2.5 million, suggesting an improvement in managing COVID-19 related costs as the pandemic evolved.