What was the total value of Benihana's leasehold improvements as of December 31, 2020?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
easonable and supportable information to assess credit loss estimates. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its financial statements.
Note 3 – Property and Equipment, net
Property and equipment, net consist of the following (in thousands):
| | December 31, 2021 | December 31, 2020 | |---------------------------------------
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the value of leasehold improvements as of December 31, 2020, was $71,654. Leasehold improvements represent the costs Benihana incurs to customize and enhance leased properties to suit their restaurant operations. These improvements can include modifications to the building's interior, such as new flooring, wall treatments, lighting, and the installation of specialized kitchen equipment.
For a prospective Benihana franchisee, understanding the value of leasehold improvements is crucial because it reflects the investment in the physical space of the restaurant. These improvements are typically amortized over the shorter of the asset's useful life or the remaining lease term. The accumulated depreciation and amortization related to these improvements was ($30,948) as of the same date.
The net value of leasehold improvements (original cost less accumulated depreciation) impacts Benihana's overall financial health and is a factor in assessing the company's profitability and asset management. Franchisees should consider how these figures might influence the financial stability of the franchise system and the potential for future growth and investment in restaurant locations.
It is important to note that these figures are specific to the company-owned restaurants and may not directly reflect the investment required for a franchised location. However, they provide a benchmark for understanding the scale of investment in physical assets within the Benihana system.