Does Benihana guarantee that its operational policies and training will be effective in keeping employees and customers safe from COVID-19?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
rbated by resurgences and the spread of variants of the coronavirus. It remains difficult to predict the full impact of the COVID-19 pandemic on the broader economy and how consumer behavior may change, and whether such change is temporary or permanent.
We have made operational changes to adhere to government requirements on safety and sanitation in our restaurants. However, we cannot guarantee that changes to our operational policies and training will be effective to keep our employees and customers safe from COVID-19. COVID-19 may impact the willingness of customers to dine outside of the home. While it is not possible at this time to estimate the full impact that COVID-19 could have on our business going forward, the continued spread of the virus and the measures taken by governments or by us in response could adversely impact our business, financial condition and results of operations.
Costs associated with mitigating the impact of COVID-19 are significant and will continue in the future.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana does not guarantee that its operational policies and training will be effective in keeping employees and customers safe from COVID-19. The document states that while Benihana has made operational changes to adhere to government requirements on safety and sanitation in its restaurants, there is no assurance that these measures will completely protect against the virus. The COVID-19 pandemic has had a significant effect on Benihana's restaurant traffic, business, financial condition, and results of operations. In 2022 and 2021, Benihana incurred COVID-19 related costs of $2.5 million and $5.8 million, respectively.
This lack of guarantee highlights the unpredictable nature of the pandemic and its potential impact on the restaurant business. Factors such as government regulations, customer willingness to dine out, and the spread of the virus itself are beyond Benihana's control. The FDD also notes that health concerns arising from outbreaks of other flu viruses or diseases, or regional or global health pandemics could severely affect their business.
For a prospective franchisee, this means understanding that investing in a Benihana franchise carries the risk of potential disruptions and additional costs related to health and safety measures. It would be prudent to inquire about the specific operational changes Benihana has implemented, the ongoing costs associated with these measures, and the potential impact on profitability. Franchisees should also consider how local regulations and customer sentiment in their specific area might affect their business in the event of future outbreaks or health concerns.