What was the total operating income (loss) for Benihana in 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| For the year ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Revenues: | ||||
| Owned restaurant net revenue | $ | 264,404 | $ | 136,618 |
| Management, license and incentive fee revenue | 12,774 | 5,325 | ||
| Total revenues | 277,178 | 141,943 | ||
| Cost and expenses: | ||||
| Owned operating expenses: | ||||
| Owned restaurant cost of sales | 67,468 | 34,024 | ||
| Owned restaurant operating expenses | 144,529 | 87,042 | ||
| Total owned operating expenses | 211,997 | 121,066 | ||
| General and administrative (including stock-based compensation of $3,618 | ||||
| and $1,773 for the years ended December | 25,573 | 13,922 | ||
| 31, | ||||
| 2021 and 2020, respectively) | ||||
| Depreciation and amortization | 10,790 | 10,114 | ||
| COVID-19 related expenses | 5,821 | 5,492 | ||
| Transaction costs | 160 | 1,109 | ||
| Lease termination expenses | 1,912 | 3,315 | ||
| Agreement restructuring expenses | 503 | 452 | ||
| Pre-opening expenses | 1,037 | 178 | ||
| Other income, net | — | (11) | ||
| Total costs and expenses | 257,793 | 155,637 | ||
| Operating income (loss) | 19,385 | (13,694) | ||
| Other (income) expenses, net: | ||||
| Interest expense, net of interest income | 3,780 | 5,329 | ||
| Loss on early debt extinguishment | 600 | — | ||
| Gain on CARES Act Loan Forgiveness | (18,529) | — | ||
| Total other (income) expenses, net | (14,149) | 5,329 | ||
| Income (loss) before provision (benefit) for income taxes | 33,534 | (19,023) | ||
| Provision (benefit) for income taxes | 1,586 | (5,400) | ||
| Net income (loss) | 31,948 | (13,623) | ||
| Less: net income (loss) attributable to noncontrolling interest | 600 | (798) | ||
| Net income (loss) attributable to The ONE Group Hospitality, | $ | 31,348 | $ | (12,825) |
| Inc. |
The following table sets forth certain statements of operations data as a percentage of total revenues for the periods indicated. Certain percentage amounts may not sum to total due to rounding.
| 2021 2020 Revenues: Owned restaurant net revenue 95.4 % 96.2 % Management, license and incentive fee revenue 4.6 % 3.8 % Total revenues 100.0 % 100.0 % Cost and expenses: Owned operating expenses: Owned restaurant cost of sales (1) 25.5 % 24.9 % Owned restaurant operating expenses (1) 54.7 % 63.7 % Total owned operating expenses (1) 80.2 % 88.6 % General and administrative (including stock-based compensation of 1.3% and 1.2% for the years ended December 31, 2021 and 2020, respectively) 9.2 % 9.8 % Depreciation and amortization 3.9 % 7.1 % COVID-19 related expenses 2.1 % 3.9 % Transaction costs 0.1 % 0.8 % Lease termination expenses 0.7 % 2.3 % Agreement restructuring expenses 0.2 % 0.3 % Pre-opening expenses 0.4 % 0.1 % Other income, net —% —% Total costs and expenses 93.0 % 109.6 % Operating income (loss) 7.0 % (9.6)% Other (income) expenses, net: Interest expense, net of interest income 1.4 % 3.8 % Loss on early debt extinguishment 0.2 % —% Gain on CARES Act Loan Forgiveness (6.7)% —% Total other (income) expenses, net (5.1)% 3.8 % Income (loss) before provision (benefit) for income taxes 12.1 % (13.4)% Provision (benefit) for income taxes 0.6 % (3.8)% Net income (loss) 11.5 % (9.6)% Less: net income (loss) attributable to noncontrolling interest 0.2 % (0.6)% 11.3 % (9.0)% | | For the year ended December 31, | |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the operating income (loss) for the year ended December 31, 2020, was (9.6)%. This indicates that Benihana's expenses exceeded its revenue, resulting in an operating loss.
Specifically, Benihana's total revenues are represented as 100.0%, while total costs and expenses amounted to 109.6% in 2020. The difference between these figures resulted in the operating loss of (9.6)%. This loss occurred during a period that included COVID-19 related expenses, which accounted for 3.9% of the total costs and expenses.
For a prospective franchisee, this information highlights the financial challenges Benihana faced during 2020. While the document also shows a recovery in 2021 with an operating income of 7.0%, it is important to consider the factors that contributed to the loss in 2020, such as the impact of the COVID-19 pandemic and related expenses. Franchisees should investigate how Benihana has adapted its business model to mitigate similar risks in the future.