For the Benihana franchise, what accounting principles were used in the preparation of the consolidated financial statements of The ONE Group Hospitality, Inc. for the year ended December 31, 2020, according to the auditor's opinion?

According to Benihana's 2024 Franchise Disclosure Document, the auditor's opinion included in Item 22 states that the consolidated financial statements of The ONE Group Hospitality, Inc. are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). However, the provided excerpts do not contain an auditor's opinion for the year ended December 31, 2020. Instead, the available reports focus on the years ended December 31, 2021, 2022, and 2023.

For a prospective Benihana franchisee, this means that while the financial statements are prepared using standard GAAP accounting principles, the FDD does not offer insight into the auditor's specific opinion for the financial year 2020. Understanding the basis of presentation is crucial for franchisees as it ensures a level of standardization and comparability in financial reporting. GAAP provides a common framework that allows franchisees to better assess the financial health and performance of the company.

Given the absence of the 2020 auditor's opinion, it would be prudent for a potential Benihana franchisee to request this specific document from the franchisor. Reviewing the auditor's opinion for that year could reveal important trends or issues that might not be apparent from the more recent reports. It is essential to have a complete picture of the company's financial history to make an informed investment decision.

In summary, while the FDD confirms the use of GAAP, the specific auditor's opinion for the year ending December 31, 2020, is not included in the provided excerpts. A prospective franchisee should seek this additional information to gain a comprehensive understanding of Benihana's financial reporting and stability.