What was the total amount of Benihana's pre-opening expenses related to non-cash pre-open rent for 2023?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
1 million for 2022. The increase was attributable to increased stock-based compensation expense and additional investments required ahead of new restaurant openings partially offset by lower incentive-based performance compensation. As a percentage of revenues, general and administrative costs were 9.2% in both 2023 and 2022.
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company incurred $8.9 million in pre-opening expenses in 2023. These expenses primarily covered payroll, training, and non-cash rent for six STK and Kona Grill restaurants that opened during the year, as well as for restaurants currently under development. Of this $8.9 million, $1.8 million was specifically related to non-cash pre-open rent.
For a prospective Benihana franchisee, understanding these pre-opening expenses is crucial for financial planning. The $1.8 million figure for non-cash rent indicates that a portion of the pre-opening costs does not involve immediate cash outlays but rather represents accounting adjustments related to the lease agreements. This could include the amortization of leasehold improvements or rent abatements received as part of the lease terms.
It's important to note that these figures pertain to STK and Kona Grill restaurants, not Benihana restaurants specifically. The FDD excerpt does not provide a breakdown of pre-opening expenses for Benihana restaurants. A potential franchisee should inquire about the specific pre-opening expenses associated with opening a Benihana franchise, including a detailed breakdown of cash and non-cash components, to accurately estimate their initial investment and operating capital needs.