Has Benihana made any operational changes to adhere to government requirements on safety and sanitation in its restaurants due to COVID-19?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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 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.
Health concerns arising from outbreaks of flu viruses or other diseases, or regional or global health pandemic could severely affect our business.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana has indeed made operational changes to adhere to government requirements regarding safety and sanitation in its restaurants in response to the COVID-19 pandemic. The FDD indicates that the COVID-19 pandemic has significantly affected Benihana's business and results. In 2022 and 2021, Benihana incurred COVID-19 related costs of $2.5 million and $5.8 million, respectively.
However, Benihana states that it cannot guarantee that these changes to operational policies and training will be fully effective in safeguarding employees and customers from COVID-19. The document also acknowledges that COVID-19 may continue to impact customers' willingness to dine outside their homes, which could adversely affect Benihana's business, financial condition, and results of operations.
For a prospective franchisee, this means that while Benihana has taken steps to comply with safety and sanitation requirements, the effectiveness of these measures is not guaranteed. The franchisee should be prepared for the possibility of ongoing costs associated with maintaining these safety standards and the potential for continued impact on customer traffic and revenue due to the pandemic. It is important to note that the FDD also mentions that health concerns arising from outbreaks of other viruses or diseases could also severely affect Benihana's business.