What was the reported amount of Benihana's operating lease liabilities as of December 31, 2022?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
sumptions.
- We evaluated the reasonableness of management's undiscounted future cash flows analysis by comparing management's projections to (1) the Company's historical results, (2) internal communications to management and the Board of Directors, (3) external communications made publicly by management, and (4) industry data.
- We tested the completeness and accuracy of the underlying source information used by management to identify quantitative indicators of impairment.
/s/ Deloitte & Touche LLP
Denver, Colorado March 14, 2024
We have served as the Company's auditor since 2021.
F-3
THE ONE GROUP HOSPITALITY, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share information)
| December 31, 2023 | December 31, 2022 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 21,047 | $ 55,121 |
| Accounts receivable | 17,264 | 15,220 |
| Inventory | 6,184 | 5,728 |
| Other current assets | 1,809 | 2,091 |
| Due from related parties | 376 | 376 |
| Total current assets | 46,680 | 78,536 |
| Property and equipment, net | 139,908 | 94,087 |
| Operating lease right-of-use assets | 95,075 | 85,161 |
| Deferred tax assets, net | 14,757 | 12,323 |
| Intangibles, net | 15,306 | 15,290 |
| Other assets | 4,636 | 4,774 |
| Security deposits | 883 | 853 |
| Total assets | $ 317,245 | $ 291,024 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 19,089 | $ 13,055 |
| Accrued expenses | 28,333 | 22,409 |
| Deferred gift card revenue and other | 2,077 | 2,115 |
| Current portion of operating lease liabilities | 6,897 | 6,336 |
| Current portion of long-term debt | 1,500 | 1,500 |
| 266 | 256 | |
| Other current liabilities | ||
| Total current liabilities | 58,162 | 45,671 |
| Operating lease liabilities, net of current portion | 120,481 | 105,247 |
| Long-term debt, net of current portion | 70,410 | 70,544 |
| Other long-term liabilities | 832 | 972 |
| Total liabilities | 249,885 | 222,434 |
| Commitments and contingencies (Note 14) | ||
| Stockholders' equity: | ||
| Common stock, $0.0001 par value, 75,000,000 shares authorized; 33,560,428 issued | ||
| and 31,283,975 outstanding at December 31, 2023 and 32,829,995 shares issued and | ||
| 31,735,423 outstanding at December 31, 2022 | 3 | 3 |
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized; |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company's operating lease liabilities, net of the current portion, were reported as $105,247 as of December 31, 2022. This figure represents the long-term obligations Benihana has for the use of leased properties and equipment, excluding the portion of these liabilities due within the next year.
For a prospective Benihana franchisee, understanding these lease liabilities is crucial because it reflects the financial commitments Benihana has already undertaken. While franchisees typically enter into their own lease agreements, the overall financial health and stability of the franchisor, as indicated by these liabilities, can impact the support and resources available to franchisees. A high level of lease liabilities could indicate a significant fixed cost for Benihana, which might affect its ability to invest in franchisee support, marketing, or new initiatives.
It's also worth noting that the current portion of operating lease liabilities, which represents the amount due within one year, was $6,336 as of the same date. This distinction between the current and non-current portions provides a more detailed view of Benihana's short-term versus long-term financial obligations related to its leases. Reviewing these figures in comparison to previous years and to other similar franchise systems can offer a better understanding of Benihana's financial management and risk profile.