What is the estimated cost of land purchased for a typical Benihana restaurant building?

According to Benihana's 2024 Franchise Disclosure Document, the estimated cost for land purchased for a typical restaurant building ranges from $1,400,000 to $2,000,000. This cost is separate from the estimated $2,500,000 to $4,500,000 for the design and construction of a freestanding restaurant building and improvements.

Benihana restaurants are typically situated on approximately 1.5 acres of land and have a building area of approximately 6,000 to 8,000 square feet. These restaurants are usually located in restaurant rows or commercial areas with residential areas nearby. The document specifies that the cost of purchasing real estate is not included in the real estate improvements estimate and varies significantly from location to location.

For a prospective franchisee, this means that securing land represents a substantial initial investment, separate from the costs of constructing the building itself. The wide range in land costs underscores the importance of thoroughly researching real estate prices in the target market before committing to a Benihana franchise. Franchisees should also consider the alternative of leasing, although this may involve additional expenses for improvements and building construction, as well as ongoing rent payments that may include a percentage of gross sales.