What was the operating income for Benihana in 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| For the year ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Revenues: | ||||
| Owned restaurant net revenue | $ | 264,404 | $ | 136,618 |
| Management, license and incentive fee revenue | 12,774 | 5,325 | ||
| Total revenues | 277,178 | 141,943 | ||
| Cost and expenses: | ||||
| Owned operating expenses: | ||||
| Owned restaurant cost of sales | 67,468 | 34,024 | ||
| Owned restaurant operating expenses | 144,529 | 87,042 | ||
| Total owned operating expenses | 211,997 | 121,066 | ||
| General and administrative (including stock-based compensation of $3,618 | ||||
| and $1,773 for the years ended December | 25,573 | 13,922 | ||
| 31, | ||||
| 2021 and 2020, respectively) | ||||
| Depreciation and amortization | 10,790 | 10,114 | ||
| COVID-19 related expenses | 5,821 | 5,492 | ||
| Transaction costs | 160 | 1,109 | ||
| Lease termination expenses | 1,912 | 3,315 | ||
| Agreement restructuring expenses | 503 | 452 | ||
| Pre-opening expenses | 1,037 | 178 | ||
| Other income, net | — | (11) | ||
| Total costs and expenses | 257,793 | 155,637 | ||
| Operating income (loss) | 19,385 | (13,694) | ||
| Other (income) expenses, net: | ||||
| Interest expense, net of interest income | 3,780 | 5,329 | ||
| Loss on early debt extinguishment | 600 | — | ||
| Gain on CARES Act Loan Forgiveness | (18,529) | — | ||
| Total other (income) expenses, net | (14,149) | 5,329 | ||
| Income (loss) before provision (benefit) for income taxes | 33,534 | (19,023) | ||
| Provision (benefit) for income taxes | 1,586 | (5,400) | ||
| Net income (loss) | 31,948 | (13,623) | ||
| Less: net income (loss) attributable to noncontrolling interest | 600 | (798) | ||
| Net income (loss) attributable to The ONE Group Hospitality, | $ | 31,348 | $ | (12,825) |
| Inc. |
The following table sets forth certain statements of operations data as a percentage of total revenues for the periods indicated. Certain percentage amounts may not sum to total due to rounding.
| 2021 2020 Revenues: Owned restaurant net revenue 95.4 % 96.2 % Management, license and incentive fee revenue 4.6 % 3.8 % Total revenues 100.0 % 100.0 % Cost and expenses: Owned operating expenses: Owned restaurant cost of sales (1) 25.5 % 24.9 % Owned restaurant operating expenses (1) 54.7 % 63.7 % Total owned operating expenses (1) 80.2 % 88.6 % General and administrative (including stock-based compensation of 1.3% and 1.2% for the years ended December 31, 2021 and 2020, respectively) 9.2 % 9.8 % Depreciation and amortization 3.9 % 7.1 % COVID-19 related expenses 2.1 % 3.9 % Transaction costs 0.1 % 0.8 % Lease termination expenses 0.7 % 2.3 % Agreement restructuring expenses 0.2 % 0.3 % Pre-opening expenses 0.4 % 0.1 % Other income, net —% —% Total costs and expenses 93.0 % 109.6 % Operating income (loss) 7.0 % (9.6)% Other (income) expenses, net: Interest expense, net of interest income 1.4 % 3.8 % Loss on early debt extinguishment 0.2 % —% Gain on CARES Act Loan Forgiveness (6.7)% —% Total other (income) expenses, net (5.1)% 3.8 % Income (loss) before provision (benefit) for income taxes 12.1 % (13.4)% Provision (benefit) for income taxes 0.6 % (3.8)% Net income (loss) 11.5 % (9.6)% Less: net income (loss) attributable to noncontrolling interest 0.2 % (0.6)% 11.3 % (9.0)% | | For the year ended December 31, | |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the operating income for the year ended December 31, 2021, was 7.0%. This figure is expressed as a percentage of total revenues. In 2020, Benihana experienced an operating loss of (9.6)%.
Operating income is a key indicator of a company's profitability from its core business operations. For a prospective Benihana franchisee, this indicates the percentage of revenue remaining after deducting operating expenses like the cost of sales, operating expenses, general and administrative costs, depreciation, and other expenses. A positive operating income, such as the 7.0% reported for 2021, suggests that Benihana's business model is profitable at the operational level.
It's important to note that this percentage does not reflect other financial factors such as interest, taxes, or non-operating income/expenses, which are accounted for separately to arrive at net income. Franchisees should consider this operating income in conjunction with other financial metrics to gain a comprehensive understanding of Benihana's overall financial performance and stability.