What was Benihana's depreciation and amortization expense for the year ended December 31, 2022?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
Note 3 – Property and Equipment, net
Property and equipment, net consist of the following (in thousands):
| December 31, 2022 | December 31, 2021 | |
|---|---|---|
| Furniture, |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the depreciation and amortization related to property and equipment amounted to $11.7 million for the year ended December 31, 2022. This figure represents the expense recognized for the wear and tear of Benihana's physical assets, such as buildings, equipment, and furniture, over their useful lives, combined with the amortization of intangible assets.
For a prospective Benihana franchisee, understanding depreciation and amortization is crucial for assessing the financial health and profitability of the business. While franchisees do not directly deal with these expenses on the franchisor's overall financial statements, it provides insight into how Benihana manages its assets and investments. Higher depreciation and amortization expenses might indicate significant investments in new equipment or facilities, or it could reflect a shorter useful life assigned to existing assets.
It's important to note that depreciation methods and asset useful lives can vary, impacting the reported expense. Benihana depreciates computers and equipment as well as furniture and fixtures over their useful lives from three to ten years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the remaining term of the associated lease. Intangible assets are amortized using the straight-line method over their estimated useful life of 10 to 20 years. Franchisees should consider these factors when evaluating Benihana's financial performance and comparing it to other franchise opportunities.
Furthermore, the FDD also provides information on the depreciation and amortization for other periods, such as $9.9 million for the year ended December 31, 2021. Comparing these figures over time can reveal trends in Benihana's capital expenditures and asset management strategies. Reviewing these trends can help a potential franchisee understand how Benihana invests in its business and maintains its assets, which can impact the long-term sustainability and profitability of the franchise system.