How did Benihana's owned restaurant net revenue change from 2020 to 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
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(1) Operating loss for the Corporate segment for the years ended December 31, 2021 and 2020 includes $5.8 million and $5.5 million, respectively, in COVID-19 related expenses.
Results of Operations for the Years Ended December 31, 2021 and December 31, 2020
Revenues
Owned restaurant net revenue. Owned restaurant net revenue increased $127.8 million, or 93.5%, to $264.4 million for 2021 from $136.6 million for 2020. The increase was primarily attributable to strong sales as state and local governments eased COVID-19 seating capacity restrictions in markets where we operate combined with strong execution of our sales initiatives. Same store sales increased 92.8% in 2021.
Management, license and incentive fee revenue. Management and license fee revenues increased $7.5 million, or 139.9%, to $12.8 million for 2021 from $5.3 million for 2020. The increase was primarily attributable to local governments lifting stay at home orders and easing seating capacity restrictions in the markets in which we operate as well as revenue generated from two managed STKs, one licensed STK and three managed F&B venues we opened during 2021.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, owned restaurant net revenue saw a significant increase between 2020 and 2021. Specifically, net revenue increased by $127.8 million, which represents a 93.5% increase. In 2021, the owned restaurant net revenue totaled $264.4 million, compared to $136.6 million in 2020. This substantial growth is attributed to the easing of COVID-19 seating capacity restrictions by state and local governments in the markets where Benihana operates, along with the successful implementation of sales initiatives.
For a prospective Benihana franchisee, this indicates a strong potential for revenue growth as markets recover from pandemic-related restrictions. The increase in same-store sales by 92.8% in 2021 further supports this positive trend. This suggests that Benihana's brand is resilient and capable of capitalizing on improved market conditions. The ability to adapt and execute effective sales strategies appears to be a key factor in driving revenue growth.
However, it's important to note that while revenue increased significantly, costs also rose. For example, food and beverage costs for owned restaurants increased by $33.5 million, or 98.3%, from $34.0 million in 2020 to $67.5 million in 2021. This increase was due to the incremental sales increases. Additionally, owned restaurant operating expenses increased by $57.5 million, or 66.0%, from $87.0 million in 2020 to $144.5 million in 2021. While these costs increased, they were offset by higher average weekly sales and active management of operating costs, resulting in a decrease in operating costs as a percentage of owned restaurant net revenue.