What were the lease termination expenses for Benihana in 2023?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| | | |
| Interest expense, net of interest income | 2.1% | 0.7% | | | Total other expenses, net | 2.1% | 0.7% | | | Income before provision for income taxes | 0.7% | 4.5% | | | (Benefit) provision for income taxes | (0.5)% | 0.3% | | | Net income | 1.2% | 4.2% | | | Less: net loss attributable to noncontrolling interest | (0.2)% | (0.1)% | | | Net income attributable to The ONE Group Hospitality, | 1.4% | 4.3% | | | Inc. | | | |
(1) These expenses are being shown as a percentage of owned restaurant net revenue.
The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):
| For the year ended December 31, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Net income attributable to The ONE Group Hospitality, | $ | 4,718 | $ | 13,534 |
| Inc. | ||||
| Net loss attributable to noncontrolling interest | (692) | (215) | ||
| Net income | 4,026 | 13,319 | ||
| Interest expense, net of interest income | 7,028 |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the lease termination expenses for the year 2023 were not explicitly listed as a specific dollar amount. However, the document does include a table that shows a breakdown of various expenses for the years 2023 and 2022. In this table, the line item for "Lease termination expense (1)" shows a value of "—" for 2023, which likely indicates that there were no lease termination expenses recorded for that year.
Lease termination expenses are defined in the document as costs associated with closed, abandoned, and disputed locations or leases. The absence of these expenses for 2023 could be a positive sign, suggesting that Benihana did not encounter significant issues with restaurant closures or lease disputes during that period.
Prospective franchisees should note that while there were no recorded lease termination expenses in 2023, such expenses did occur in previous years, with $0.3 million in 2022, $1.9 million in 2021 and $3.3 million in 2020. This indicates that lease-related issues can arise, and it would be prudent for potential franchisees to inquire about the factors that contributed to these past expenses and how Benihana manages lease agreements to mitigate such costs.