What does Benihana define as 'Same Store Sales' (SSS) for its restaurants?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
We use the following key performance indicators in evaluating our restaurants and assessing our business:
Same Store Sales ("SSS"). SSS represents total food and beverage sales at domestic owned and managed restaurants opened for at least a full 18-month period at the beginning of each quarter, which removes the impact of new restaurant openings in comparing the operations of existing restaurants. For STK SSS, this measure includes total revenue from our owned and managed domestic STK locations, excluding revenues from our owned STK restaurant located in the W Hotel in Los Angeles, California due to the impact of the F&B hospitality management agreement with the hotel. Revenues from locations where we do not directly control the event sales force are excluded from this measure.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Same Store Sales (SSS) is a key performance indicator used to evaluate the restaurants and assess the business. Benihana defines SSS as the total food and beverage sales at domestic owned and managed restaurants. These restaurants must be open for at least a full 18-month period at the beginning of each quarter. This calculation method is used to remove the impact of new restaurant openings when comparing the operations of existing restaurants.
For STK restaurants, a brand under the same parent company as Benihana, the SSS measure includes total revenue from owned and managed STK locations, with a specific exclusion. Revenues from the owned STK restaurant located in the W Hotel in Los Angeles, California, are excluded due to the impact of a food and beverage hospitality management agreement with the hotel. Additionally, revenues from locations where Benihana does not directly control the event sales force are also excluded from the SSS calculation.
Benihana uses SSS to gauge the performance of established locations by isolating sales data from the fluctuations that new restaurant openings can cause. For a prospective Benihana franchisee, understanding SSS is crucial because it provides insight into the revenue trends of existing restaurants, unaffected by the initial boost that new restaurants often experience. This metric helps in assessing the long-term viability and potential profitability of a Benihana franchise.