What are some examples of 'Direct operating expenses' for Benihana owned restaurants?

According to Benihana's 2024 Franchise Disclosure Document, direct operating expenses for Benihana owned restaurants include a variety of day-to-day costs associated with running the business. These expenses are typically measured as a variable expense based on the restaurant's net revenues, meaning they fluctuate depending on sales volume.

Specifically, direct operating expenses encompass the costs of supplies such as paper products used for various purposes, smallwares like kitchen utensils and tools, and the replacement of china, silverware, and glassware. Additionally, this category includes the costs of cleaning supplies necessary for maintaining hygiene and sanitation standards, fees charged by credit card companies for processing transactions, and the expenses associated with linen services.

For a prospective Benihana franchisee, understanding these direct operating expenses is crucial for budgeting and financial planning. Since these expenses are variable, franchisees can expect them to increase or decrease in proportion to their restaurant's revenue. Efficient management of these costs can directly impact the profitability of the franchise.