What was the net income attributable to The ONE Group Hospitality, Inc. 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 net income attributable to The ONE Group Hospitality, Inc. was $4,718 for the year ended December 31, 2023. This is a decrease compared to the previous year, as the net income attributable to The ONE Group Hospitality, Inc. was $13,534 for the year ended December 31, 2022.
This decrease in net income is further explained in the FDD, noting that the net income attributable to The ONE Group Hospitality, Inc was $4.7 million in 2023 compared to $13.5 million in 2022. The document attributes the decrease in operating income to higher pre-opening expenses due to an increased number of venue openings in 2023, increased depreciation expenses associated with venues opened since August 2022, and higher labor costs due to wage inflation and investments in human capital in anticipation of growth.
Prospective franchisees should consider these financial results and the factors contributing to the change in net income when evaluating the Benihana franchise opportunity. Understanding the reasons behind the fluctuations in net income can provide insights into the financial performance and potential challenges of the business. It's important to further investigate the details of these expenses and investments to assess their impact on the overall profitability and sustainability of a Benihana franchise.