How much did Benihana spend on COVID-19 related expenses in 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
under dispute with landlords.
Agreement restructuring. Agreement restructuring expense for both 2021 and 2020 was $0.5 million, related to the restructuring of agreements with our management and license partners. We do not expe
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company incurred $5.8 million in COVID-19 related expenses during 2021. These expenses primarily covered sanitation, supplies, and safety precautions implemented to prevent the spread of COVID-19. This figure is part of the overall operating loss for the Corporate segment for the year ended December 31, 2021.
For a prospective Benihana franchisee, this indicates the potential for significant unforeseen expenses related to health crises. While the worst of the COVID-19 pandemic may be over, the possibility of future outbreaks or similar events could necessitate similar investments in safety and sanitation measures. Understanding these potential costs is crucial for financial planning and risk assessment.
It's also worth noting that in 2022, Benihana's COVID-19 related expenses decreased to $2.5 million, suggesting a possible reduction in these costs as the pandemic situation evolved. However, the 2021 figure provides a clear example of the scale of expenses that can arise during such events, impacting the overall profitability and operational costs of the franchise.