What was the value of Benihana's finance lease right-of-use assets as of December 31, 2023?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, 2023 | December 31, 2022 | ||
|---|---|---|---|
| Lease cost | |||
| Operating lease cost | $ 16,466 | $ | 14,587 |
| Finance lease cost | |||
| Amortization of ROU assets | 210 | 59 | |
| Interest on lease liabilities | 82 | 25 | |
| Total finance lease cost | 292 | 84 | |
| Variable lease cost (1) | 12,158 | 11,373 | |
| Short-term lease cost | 1,114 | 945 | |
| Total lease cost | $ 30,030 | $ | 26,989 |
| Weighted average remaining lease term | |||
| Operating leases |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the value of their finance lease right-of-use assets as of December 31, 2023, was $850. This figure reflects the company's capitalized cost of assets obtained through finance leases, which are leases that effectively transfer ownership of the asset to the lessee (Benihana). These assets are reported separately on Benihana's balance sheet.
Finance leases are different from operating leases. Finance leases are treated more like a purchase, with the asset and related liability recorded on the balance sheet. The right-of-use asset represents Benihana's right to use the leased asset over the lease term. The value of $850 indicates the net book value of these assets, reflecting any accumulated depreciation.
For a prospective Benihana franchisee, understanding the company's lease obligations and asset values is crucial for assessing its financial health and stability. While the finance lease right-of-use assets are a small portion of Benihana's total assets, they still represent a financial commitment that franchisees should be aware of. Reviewing the complete financial statements and related notes in the FDD provides a more comprehensive view of Benihana's financial position.