How much did Benihana receive in proceeds from CARES Act Loans in 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
as $11.5 million primarily for the construction of STK restaurants in Bellevue, Washington; Dallas, Texas; San Francisco, California; and a Kona Grill restaurant in Riverton, Utah, as well as capital expenditures for existing restaurants and technology initiatives compared to $5.8 million for 2020.
Financing Activities. Net cash used in financing activities was $20.3 million
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company received $18.3 million in proceeds from CARES Act Loans in May 2020. These loans were obtained through the Paycheck Protection Program (PPP) and were subsequently forgiven in 2021.
The CARES Act Loans were designed to support businesses during the COVID-19 pandemic, and the funds were eligible for forgiveness if used for qualified purposes, with at least 60% allocated to payroll costs. Benihana states that it used all proceeds from these loans in accordance with the CARES Act and SBA regulations, which facilitated the re-opening of in-person dining and the return of approximately 3,000 furloughed employees to work.
For a prospective Benihana franchisee, this information provides insight into how the company managed its finances during a challenging economic period. The fact that the loans were forgiven suggests that Benihana met the necessary requirements and utilized the funds responsibly. While this specific event is in the past, it demonstrates the company's ability to navigate financial challenges and leverage available resources.