WHY INVEST IN A BENIHANA RESTAURANT?
The Benihana name is well known throughout the food industry as an established, quality-conscious company. Benihana has grown from a single teppanyaki restaurant in New York City in 1964, to 77 restaurants in the United States, Central and South America (excluding Mexico) and the Caribbean, with more company owned and franchise restaurants in the planning or development stages.
Benihana's solid management team is committed to keeping Benihana one of the world's finest and most thriving restaurant organizations. Our proven method of operation has tremendous appeal and represents a value to all future licensees. Together, we will ensure a consistent but controlled expansion.
STRONG SUPPORT NETWORK.
Benihana's corporate staff will provide expert guidance for maximizing sales, profit and operational efficiency in a number of areas. During the start-up phase you will receive assistance in site selection, construction, recruitment and training, implementation of standard operating procedures, sources for supplies and equipment and on-site opening assistance.
Although Benihana assumes no direct financial responsibility for real estate, we will provide guidelines and counseling on site selection. Prior to the opening of the restaurant, Benihana will also make available to you its construction staff to assist in the design, planning and installation of your licensed restaurant. However, the construction department will function in a consulting or supervisory capacity only.
SOLID RESTAURANT OPERATIONS TRAINING.
As a Benihana licensee, you will receive training in every facet of operations — from product preparation to equipment handling and maintenance, guest service, employee relations and business record keeping. Our training program for chefs consists of a twelve- to sixteen-week program, a portion of which is spent working as a chef in a Benihana restaurant. The chefs are trained in both kitchen and tableside food preparation as applied at Benihana restaurants. Additionally, lectures on general restaurant management and Benihana's specific adaptation are offered. The manager training program is similar, except that the manager is given in-depth exposure to each position in the restaurant from busboy through manager.
Benihana's Management Team will provide pre- and post-opening assistance and make periodic inspection tours of your restaurant to ensure that established standards and procedures are being utilized to your maximum benefit. Benihana provides assistance to you or your accountant in setting up your accounting system. The system established will accommodate the day-to-day procedures covering sales, payroll, guests served, production, cash and petty cash reports as provided in Benihana's operating manual.
An operations manual is furnished to each new licensee, which outlines day-to-day procedures, along with specifics of a typical restaurant layout, equipment, construction cost and opening budget.
OVERVIEW OF STARTUP COSTS.
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.
ONGOING 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.
After you have read all the franchise information and a Benihana franchise sounds too good to pass up, call or write Benihana for a Franchise Application. Our licensing representative will guide you through every step of your new venture.
Step One: Request and submit application.
If you feel you are qualified to become a licensee, return the application to:
21500 Biscayne Boulevard
Aventura, FL 33180
Step Two: Submit your financial authorization.
At the same time you return the application, submit a financial disclosure authorization form to your bank or other financial institution.
All licensee applications must be accompanied by verification of available cash and other liquid assets. Please note that this verification must be on the bank's business letterhead and mailed directly to Benihana in Miami. Our evaluation procedure, including a retail credit check and detailed background investigation is completely confidential.
Step Three: Initial interview.
After verification of the information on your application and confirmation of your financial ability to undertake the investment, you will be contacted to meet personally with a Benihana representative. At this meeting you will be provided with the company's Uniform Franchise Offering Circular as legally required. In this meeting, your rights and obligations as a franchisee will be discussed in some detail. It is also expected that the franchise prospect will view this meeting as an opportunity to interview Benihana, asking as many questions as necessary to arrive at a comfort level with the franchisee/franchisor relationship.
Step Four: Do your Homework.
After the Initial Interview, Benihana will have reviewed your qualifications to determine if you qualify. Now it is your turn. You can visit our existing restaurants, talk to industry sources and contact our existing franchises to help you answer any questions you might have. You can obtain location and contact information from our locator. We cannot begin to tell you how important it is that you also interview Benihana personnel, we highly encourage you to do so.
Step Five: Issuance of license.
After completion of Step Four, you may request that a Franchise Agreement be issued to you. This will represent your first financial commitment to the Franchise. The issuance of the Franchise Agreement grants you the right to use the internationally famous 'Benihana' name, corporate logo and various recognized service marks in the operation of your restaurant, so long as such usage complies with the federal laws and regulations intended to preserve the integrity of registered marks.
N. Little Rock, AR
Key West, FL
Las Vegas, NV
Palm Beach, Aruba
Panama City, Panama
San Salvador, El Salvador
Sao Paulo, Brazil
What qualifications does Benihana seek in its potential franchisees?
The following qualifications, among others are essential in order to be considered for a Benihana franchise:
1. An entrepreneurial spirit and strong desire to succeed.
2. The ability to motivate and train people.
3. The ability to manage finances.
4. The willingness to personally devote full time and best efforts to the day-to-day operation of the restaurant as an on-premises franchisee.
5. The willingness to complete a comprehensive training and evaluation program on a part-time basis, in order to become proficient in all aspects of running the restaurant business.
6. Meeting the financial qualifications.
What assets are initially required to build a franchise?
Benihana recommends liquid assets of at least $600,000 per unit.
Does Benihana finance franchisees internally?
No. Benihana constantly networks with franchisee financing sources around the country to provide you with referrals for the best prospective lenders available, but it is each franchisee's responsibility to source and qualify for financing on the merits of his or her own financial strength.
What is the availability of securing a site in my area?
The availability of franchises in specific areas will be discussed during your initial interview.
What are the royalty fees if any for a Benihana franchise?
A continuing royalty fee of five percent will be charged monthly based on gross sales for Benihana Inc. franchises.
How can I obtain a copy of your franchise agreement?
Our franchise agreement was developed by specialists in franchising and is a valuable document which we distribute only to serious applicants. We will be happy to provide you with a copy of the Franchisee Agreement and our Offering Circular during the first face-to-face meeting.
What are the total costs for building a Benihana franchise?
The approximate cost to build a typical freestanding Benihana restaurant in a suburban market is $2.2 Million to $2.8 Million. This would be approximately 7,000 square feet with a dining capacity of 16 teppanyaki tables or 128 patrons.
What should my earning expectations be?
Franchise law limits the kind of earnings information Benihana can provide to you. We will provide you with enough information to assist you in completing your own projected profit and loss statement, which will allow you to arrive at a comfort level with earning expectations. You may also obtain information from other franchisees in order to help you in making your investment decision.
What is the licensing fee for opening a Benihana franchise?
The initial fee per license issued is $40,000 per Domestic Franchise and $50,000 per Franchise in Central/South America (excluding Mexico) or the Caribbean. The 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 of the building and improvements, opening of the restaurant, training of staff, enforcement and protection of trademarks, and costs incidental to locating sources of supply.
If, after you have reviewed the franchise materials, you still have questions about obtaining a Benihana franchise, contact the Benihana franchise department by submitting the form below or calling toll-free 1 (800) 327-3369.
FRANCHISING APPLICATION FORM
21500 Biscayne Boulevard
Aventura, FL 33180
Phone: (305) 593-0770
Fax: (305) 675-3849