Chain of 15 restaurants that grossed over $12 million per year
Started by Hiroaki (Rocky) Aoki, President of Benihana of Tokyo
Philosophy of the restaurant business is: Simply to make people happy
Why is Benihana successful:
Historical Authenticity:
Availability and Cost of Labor in USA
Hibachi table arrangement: Eliminate need for a conventional kitchen
Provide unusual amount of attentive service
Keep labor cost to 10%-12% of gross sales
Usage of restaurant space
Increase proportion of floor area devoted to productive dining space
22% of total space of a unit is “Back of the House”:
Includes preparation areas, dry and refrigerated storage, employee dressing rooms, and office space. (Normal is 30%)
No waste concept
Reduce menu to only 3 simple entrees: Steak, Chicken, and Shrimp.
Cut food costs to between 30% and 35% of food sales
Advertising: Substantial investment in creative advertising and PR
Company invested 8%-10% of its gross sales
Different and original in approach
Visual product to sell, Benihana uses contemporary copy(text), sometimes offbeat
Know who customers really are, they conduct a considerable amount of market research
Location, location, locaton:
Main criteria for site selection: high traffic & locate in predominant business districts
Showmanship factor:
Chef training is key to success
Restaurant breakdown:
3 units: Chicago (largest money-maker – instant success, grossed approximately $1.3mil/year)
4th unit: San Francisco
5th unit: Joint venture in Las Vegas in 1969
Franchises: 6 (Harrisburg, Fort Lauderdale, Portland, Seattle, Beverly Hills, Boston)
Expense Breakdown:
Food and beverage split was 70/30
Food (30%),
Labor (10%),
Advertising (10%),
Management (4%)
Rent (5%).
Average turnover
1 hour – Teppanyaki table was an hour
1 hour to 1 and half in slow periods
Average check: including food and beverage, $6 at lunch, $10 at dinner
Lunch business important, accounting 30%-40% of the total dollar volume
Beverage sales: West – about 18% of total sales; East, about 20%-22%
Palace, they ran a handsome 30%-33% of total sales
Beverage cost averaged 20% of beverage sales
Benihana Challenges:
Rent normally ran 5%-7% of sales for 5,000-6,000 square feet of floor space.
Difficult to attract chefs and other personnel from Japan
Low Organization and Control
Each restaurant carried simple management structure:
Manager (salary of $15,000/year),
Assistant manager ($12,000/year),
or 3 front men ($9,000/year)
Staff is biggest constraints
Each unit requires 30 people
Six to eight of them are highly trained chefs
Same number of waitresses
4 to 5 managers and front men, 2 to 3 people in the bar
Remainder are bus staff and dishwashers
Future Expansion problem:
Prefer not to do franchising
Uniqueness of operation in the hands of novices made control more difficult
More profitable to own and operate the restaurants
Franchisees have no restaurant experience
Difficult for the American investors to relate to predominantly native Japanese staff
Difficult to Control
Limited to opening only five units a year
Only 2 crews of Japanese carpenters who can do the work
Cost factor – each new unit costs a minimum of $300,000
Do they need to import from Japan every item for construction, 100% authentic.
Need to decide: advantages and disadvantages of going into hotels
Presently in 2 Hilton Hotels (Las Vegas and Honolulu)
Signed an agreement with Canadian Pacific Hotels
Other areas tapped for growth:
United States – need to expand into the primary marketing areas through

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Cost Of Labor And Average Turnover. (May 31, 2021). Retrieved from