Liquid assets are one of the key indicators of whether or not a prospective Licensee is capable of financing a full-size Benihana restaurant. We recommend liquid assets of at least $800,000 per unit as a basis for pursuing in-depth feasibility discussions. Based upon our most recent openings, the minimum initial investment to open a typical freestanding domestic Benihana restaurant, excluding real property is $3.0 million. A substantial portion of this cost can normally be financed through traditional sources, depending on the Licensee's financial soundness. However, Benihana does not provide any financing to its Licensees, nor will it guarantee any note, lease or other documents executed by Licensee.
The total required investment in a Benihana restaurant also varies, depending on the Licensee's real estate arrangement (lease or purchase). Benihana has no financial involvement in the real estate, but provides experienced counseling in site selection/development and reserves the right to approve all proposed locations. The actual selection, purchase or leasing of the site is the Licensee's responsibility.
Typical costs for a Benihana restaurant license fee:
The initial fee per license issued is $40,000 per Domestic Franchise. The fee structure in South/Central America (excluding Mexico) or the Caribbean will depend on the country.
The initial fee covers the issuance of the license, as well as helping to defray the costs and expenses of Benihana in connection with our assistance and supervision in site selection, construction and improvements, opening of the restaurant, training, enforcement and protection of trademarks and costs incidental to locating sources of supply.
Cost of construction
The approximate cost to build and equip a typical freestanding Benihana restaurant in a suburban market is between $3.1 million and $3.9 million. The building size would be approximately 7,000 square feet. A restaurant this size is a self-contained unit and will provide the following facilities:
- Dining Capacity - 16 hibachi tables - seating 128 patrons
- Beverage Capacity - bar 20 patrons, lounge 70 patrons
- Service bar and kitchen preparation and pantry area
- Storage facilities for food, beverage and supply items
- Employee locker rooms
- Sanitary facilities for employees and guest
- Mechanical room
Equipment and fixtures
The approximate cost for all equipment and fixtures necessary for the opening and operation of a Benihana restaurant is $400,000 and $500,000. A portion of the equipment and fixtures is to be purchased from designated suppliers and the balance must conform to our specifications. A complete list of necessary equipment and fixtures will be provided.
Initial inventory includes all items needed to open a restaurant such as food, beverages (alcoholic and otherwise), china, glassware, paper supplies, uniforms etc. and usually cost approximately $35,000.
Approximate cost of obtaining insurance coverage is $40,000. Benihana will furnish an analysis of types of insurance required, together with the customary deductions and estimated annual premiums. Please note payment terms are sometimes available from the insurance carrier for the payment of premiums.
Working capital and reserve fund
Working capital of $150,000 should cover the estimated cost for all pre-opening expenses, such as legal fees, salaries and security deposits, in addition to any unforeseen expenses.
It is not possible for Benihana to give accurate figures on what a liquor license would cost in your city or country. We encourage you to contact the proper authorities to see what the procedures are to obtaining a liquor license. Keep in mind some jurisdictions are no longer issuing licenses.
On-going business expenses.
A continuing royalty fee is five percent (5%) of gross sales paid monthly for Benihana Inc. franchises.
An advertising contribution equal to one percent (1%) of gross sales is required. Benihana will use this fee to defray marketing and advertising expenses associated in placing national or regional advertising campaigns, this also is payable monthly.
Investment parameters for international franchises vary from country to country but are typically less capital intensive than the United States.