What were the lease termination expenses for Benihana in 2022?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
growth, increased accounting and legal fees partially offset by a decrease in performance based variable compensation. As a percentage of revenues, general and administrative costs were 9.2% in both 2022 and 2021.
Depreciation and amortization. Depreciation
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, lease termination expenses were $0.3 million in 2022, while in 2021 they were $1.9 million. These expenses are associated with costs from closed, abandoned, or disputed locations, as well as disputed leases.
For a prospective Benihana franchisee, understanding lease termination expenses is crucial. These costs can arise from various unforeseen circumstances, such as underperforming locations or disputes with landlords. The FDD indicates that Benihana incurred these expenses, highlighting the potential financial impact of such situations.
Franchisees should carefully review their lease agreements and consider potential risks associated with property selection and lease terms. While Benihana provides consultation during the site selection and construction phase, franchisees ultimately bear the responsibility for acquiring or leasing the location. Therefore, it is essential to conduct thorough due diligence and seek legal counsel to mitigate potential lease-related issues and understand the financial implications of early termination.