What was the revenue recognized by Benihana from deferred license revenue as of December 31, 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
--|--------------|--------------| | | 2022 | 2021 | | Deferred license revenue (1) | 297 | 388 | | Deferred gift card revenue (2) | 1,680 | 1,769 | | Advanced party deposits (2) | 435 | 260 | | Konavore rewards program (3) | 163 | 136 |
(1) Includes the current and long-term portion of deferred license revenue which are included in other curre
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the revenue recognized from deferred license revenue as of December 31, 2021, was $164,000. This figure represents the amount of revenue that Benihana recognized during that period from licensing fees that were initially deferred.
Deferred revenue typically arises when Benihana receives payments for services or rights that will be provided or granted over a period of time. Instead of recognizing the revenue immediately upon receipt of payment, Benihana defers the revenue and recognizes it gradually as the service is performed or the rights are granted. This accounting practice ensures that revenue is recognized in the period it is earned.
For a prospective Benihana franchisee, understanding deferred revenue is important because it provides insight into how Benihana accounts for its licensing fees and other revenue streams. It also highlights the timing of revenue recognition, which can impact the company's financial statements and performance metrics. Reviewing these figures over several years can reveal trends in Benihana's licensing activities and the overall health of its business model.