How might a virus transmitted by human contact affect Benihana's ability to staff its restaurants adequately?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
, financial condition and results of operations.
Costs associated with mitigating the impact of COVID-19 are significant and will continue in the future. We incurred COVID-19 related costs of $5.8 million and $5.5 million in 2021 and 2020, respectively.
Health concerns arising from outbreaks of flu viruses or other diseases, or regional or global health pandemic could severely affect our business.
The United States and other countries have experienced, or may experience in the future, outbreaks of viruses, such as coronavirus, norovirus, Avian Flu or "SARS," and H1N1 or "swine flu," or other diseases such as bovine spongiform encephalopathy, commonly known as "mad cow disease." If a virus is transmitted by human contact, our employees or customers may become infected, or may choose, or be advised, to avoid gathering in public places, any of which may adversely affect the guest traffic at our restaurants and the ability to adequately staff our restaurants, receive deliveries on a timely basis or
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Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the company acknowledges the potential impact of viruses transmitted by human contact on its operations. If a virus spreads through human contact, Benihana's employees or customers could become infected. This could lead employees to call out sick, reducing the available workforce. Additionally, customers might choose to avoid public places, including restaurants, which would further affect Benihana's ability to adequately staff its restaurants.
Benihana also recognizes that even the perceived risk of infection or significant health risk, even if a virus doesn't spread significantly, could adversely affect its business. This means that staffing challenges could arise not only from actual illness but also from employee and customer anxieties about potential exposure.
To mitigate these risks, Benihana has implemented operational changes to adhere to government requirements for safety and sanitation. However, the FDD states that Benihana cannot guarantee that these measures will completely protect employees and customers from viruses like COVID-19. The document also notes that the continued spread of a virus and the measures taken in response could negatively impact Benihana's business, financial condition, and results of operations. Therefore, a prospective franchisee should be aware that staffing shortages and operational disruptions are potential risks associated with outbreaks of viruses transmitted by human contact.