What was the total operating lease cost for Benihana as of December 31, 2023?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
to performance obligations that are unsatisfied as of December 31, 2023 were as follows for each year ending (in thousands):
| 2024 | $ 44 |
|---|---|
| 2025 | 44 |
| 2026 | 37 |
| 2027 | 34 |
| 2028 | 34 |
(2) Deferred gift card revenue and advance party deposits on goods and services yet to be provided are included in deferred gift card revenue and other on the consolidated balance sheets.
(3) Konavore rewards program is included in accrued expenses on the consolidated balance sheets.
Total future estimated deferred license revenue $ 218
F-18
Note 8 – Leases
The components of lease expense for the period were as follows
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the operating lease cost as of December 31, 2023, was $16,466. This figure represents the cost associated with leasing properties or equipment under operating lease agreements for Benihana. In comparison, the operating lease cost as of December 31, 2022, was $14,587.
Operating leases are short-term leases where the asset remains on the lessor's balance sheet. For a Benihana franchisee, understanding these lease costs is crucial because they directly impact the restaurant's financial obligations and profitability. These costs are part of the overall expenses that a franchisee must manage to maintain a successful business. Factors influencing these costs include the location of the restaurant, the size of the leased space, and the terms negotiated in the lease agreement.
In addition to operating lease costs, Benihana also incurs other lease-related expenses, such as variable lease costs, short-term lease costs, and finance lease costs. For instance, the variable lease cost for 2023 was $12,158, and the short-term lease cost was $1,114. The total lease cost, which includes all types of leases, amounted to $30,030 as of December 31, 2023. Prospective franchisees should carefully review all lease-related expenses to fully understand their financial commitments.
The weighted average remaining lease term for operating leases was 13 years, with a weighted average discount rate of 8.74% as of December 31, 2023. These metrics provide insight into the long-term lease obligations and the financial terms associated with those leases. Franchisees should consider these factors when evaluating the financial viability of a Benihana franchise.