How much did Benihana spend on pre-opening expenses in 2023?

According to Benihana's 2024 Franchise Disclosure Document, the company's pre-opening expenses for company-owned restaurants totaled $8.9 million in 2023. These costs primarily covered payroll, training, and non-cash rent associated with six STK and Kona Grill restaurants that opened during the year, as well as expenses for STK and Kona Grill restaurants that were under development at the time. A portion of these expenses, amounting to $1.8 million, was specifically related to non-cash pre-open rent.

For a prospective Benihana franchisee, understanding these pre-opening expenses is crucial. While this figure reflects the expenses for company-owned restaurants, it provides insight into the types and scale of costs that are typically incurred before a restaurant begins operations. These expenses include not only the obvious costs like employee salaries and training but also non-cash items like rent during the pre-opening phase.

It's important to note that these pre-opening expenses can vary significantly depending on factors such as the location of the restaurant, the size and layout of the space, and any unexpected delays in obtaining necessary permits or completing construction. Therefore, while the $8.9 million figure provides a benchmark, franchisees should conduct their own due diligence to estimate their specific pre-opening costs, considering the unique circumstances of their location and business plan. This includes understanding what support and training Benihana provides, and what costs the franchisee is responsible for covering themselves.