How does Benihana expect general and administrative expenses to change as the company grows?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
les and delivery service fees.
- Repairs and maintenance. Repairs and maintenance consist of general repair work to maintain our facilities, and computer maintenance contracts. We expect these costs to increase at each facility as they get older.
- Marketing. Marketing includes the cost of promoting our brands and, at times, can include the cost of goods used specifically for complementary purposes. Marketing costs will typically be higher during the first 18 months of a restaurant's operations.
General and administrative. General and administrative expenses are comprised of all corporate overhead expenses, including payroll and related benefits, stock-based compensation expense, professional fees, such as legal and accounting fees, insurance and travel expenses.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company anticipates that general and administrative expenses will be leveraged as the company expands. Benihana expects to become more efficient and continue its focus on best practices and cost-saving measures as it grows.
General and administrative expenses include all corporate overhead expenses. These include payroll and related benefits, stock-based compensation expense, professional fees such as legal and accounting fees, insurance, and travel expenses. Certain centrally managed general and administrative expenses are allocated specifically to restaurant locations and are reflected in owned restaurant operating expenses. These include shared services such as reservations, events, and marketing.
As Benihana's footprint increases, the company expects to benefit by leveraging system-wide operating efficiencies and best practices through the management of its general and administrative expenses as a percentage of overall revenue. This indicates that while general and administrative costs may increase in absolute terms, Benihana aims to control these costs relative to the growth in revenue, leading to improved profitability.