What were the pre-opening expenses for Benihana in 2021 related to?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
t to incur additional agreement restructuring expenses going forward.
COVID-19 related expenses. COVID-19 related expenses were $5.8 million and $5.5 million for 2021 and 2020, respectively, composed primarily of sanitation, supplies and safety precautions taken to prevent the spread of
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, pre-opening expenses in 2021 totaled $1.0 million. These expenses were primarily related to the STK Bellevue restaurant, which opened in July 2021, and non-cash pre-open rent for STK Dallas and STK San Francisco, which were under construction at the time.
Pre-opening expenses for Benihana restaurants encompass various costs incurred before the restaurant begins operations. These typically include manager salaries and relocation, employee payroll, training, and lease costs incurred before the opening date. The specific expenses can vary significantly depending on factors such as the location's proximity to existing restaurants, the amount of rent expensed during construction and training, the restaurant's size and layout, staffing requirements, the difficulty of the staffing process, travel and lodging costs, the timing of the opening, and any unexpected delays in obtaining necessary licenses and permits.
For a prospective Benihana franchisee, understanding these pre-opening expenses is crucial for financial planning. The FDD indicates that these costs can fluctuate based on various location-specific and operational factors. Franchisees should carefully consider these variables and work closely with Benihana to estimate their pre-opening expenses accurately. This will help in securing adequate funding and managing cash flow during the initial phase of the restaurant launch.