Are the financial statements of Benihana included in this FDD?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company is party to claims in lawsuits incidental to its business, including lease disputes and employee-related matters. The Company has recorded accruals in its consolidated financial statements in accordance with ASC 450, Contingencies. While the resolution of a lawsuit, proceeding or claim may have an impact on the Company's financial results for the period in which it is resolved, in the opinion of management, the ultimate outcome of such matters and judgements in which the Company is currently involved, either individually or in the aggregate, will not have a material adverse effect on the Company's consolidated financial position or results of operations.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Long-Lived Asset Impairment — Refer to Note 2 to the financial statements
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 72–73)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Item 22 discusses contracts and includes references to the company's consolidated financial statements. Specifically, it mentions that Benihana has recorded accruals in its consolidated financial statements in accordance with ASC 450, Contingencies, regarding claims in lawsuits incidental to its business. The document also includes statements regarding audits conducted in accordance with the standards of the PCAOB (Public Company Accounting Oversight Board), which included examining evidence related to amounts and disclosures in the financial statements.
Furthermore, the FDD mentions a critical audit matter related to long-lived asset impairment, referencing Note 2 to the financial statements. This indicates that the financial statements are subject to audit and include disclosures about the company's assets and accounting practices. The auditor's opinion is based on their audits, providing a reasonable basis for their opinion on the financial statements.
While these references suggest the existence of financial statements, the excerpts do not explicitly state that the full financial statements are included as a specific exhibit within this particular FDD. A prospective franchisee should confirm directly with Benihana whether the complete audited financial statements are attached as an exhibit to the FDD, and if not, request to review them separately to fully understand the financial health and performance of the company.