Benihana Company Essay Essay Example

Benihana Company Essay Essay Helping our invitees feel welcome is every bit of import as our cookery. And it is merely every bit great a accomplishment. Ever endeavoring for excellence in cordial reception. it is genuinely our restaurant household who has built Benihana’s success. Company History: Benihana. Inc. owns and licenses eating houses in the Benihana and Benihana Grill concatenation of Nipponese dinnerhouses. The eating houses specialise in an exhibition-style of Nipponese cookery called teppanyaki. Customers sit around a communal tabular array at which a Benihana chef pieces their seafood. steak. poulet. and veggies with lightning velocity. grills their repast right in forepart of them. and so tosses it accurately onto their home bases. The eating houses are decorated with Samurai armour and valuable art. and Shoji rice paper screens partition the dining countries. For the financial twelvemonth stoping March 31. 1996. the company had gross revenues of over $ 81 million. an all-time high. By December 1996. Benihana operated a sum of 49 accredited and entirely owned eating houses in 20 provinces every bit good as in Bogota. Columbia. and Aruba. Netherlands Antilles. We will write a custom essay sample on Benihana Company Essay specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Benihana Company Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Benihana Company Essay specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Early History. from Tokyo to New York The laminitis of Benihana. Inc. was a 25-year-old Olympic grappler from Japan named Hiroaki Rocky Aoki. He got his start in the eating house concern by working after school in his family’s java store in downtown Tokyo. His female parent named the household concern Benihana after a ruddy flower that survived the bombardment of Tokyo during World War II. Rocky was a combatant. supporting himself in the streets and schoolyards against bigger male child. He got hooked on wrestling. became a national university title-holder. and earned a topographic point on the 1960 Olympic squad. Although he didn’t compete because he was over his weight bound. he did fall in love with New York when the plane stopped at that place on the manner to the Games in Rome. That autumn he left Japan for the United States. In 1964. Aoki graduated from New York Community College’s School of Hotel and Restaurant Management. During the summer he earned money driving the lone ice pick truck in Harlem. The occupation was non easy. as he explained in an article in Management Review. â€Å"Every clip I robbed. I get up before the following twenty-four hours and work subsequently to do up. Every clip I lose money. I get more challenge. † With that doctrine. he managed to salvage $ 10. 000 during the summer. which. along with a loan. was plenty to get down his first eating house. Benihana of Tokyo. Aoki’s construct for his new eating house. derived from forte eating houses he knew of in Japan. was portion amusement and portion nutrient service. He wanted to offer Americans nutrient they were familiar with. such as poulet. steak. and runt. prepared in a fresh scene. He chose the teppanyaki table–a chromium steel steel grill surrounded by a wooden feeding surface–where clients could watch a knife-wielding. joke-telling chef prepare and serve their nutrient. His parents and brothers came from Japan to assist him acquire started. Unfortunately. New Yorkers equated Nipponese nutrient with natural fish and weren’t comfy sitting at a tabular array with aliens. They ignored the midtown Manhattan restaurant until the eating house critic of the New York Herald Tribune gave it a glowing reappraisal. Suddenly. everyone in New York. including the Beatles and Muhammad Ali. wanted to sit around one of Benihana of Tokyo’s four teppanyaki tabular arraies. Within six months after the reappraisal the eating house had paid for itself. and Aoki rapidly opened another eating house in a larger. fancier edifice. The new location provided the same teppanyaki-style cookery but was decorated with valuable art. Samurai armour. heavy wooden ceiling beams brought from Japan by Aoki’s male parent. and skiding Shoji screens to supply some privateness. 1965-80: Constructing a Company The Benihana construct combined sensible monetary values with good nutrient. and. by fixing what was eaten right at the tabular array. held waste to a lower limit. Net incomes were good. and. in 1968. Aoki opened his first Benihana of Tokyo outside New York City–in downtown Chicago. That location made $ 700. 000 in its first twelvemonth and continued to be one of the company’s top gaining mercantile establishments. Between 1969 and 1972. the company opened six more of its ain eating houses and licensed franchisees to open another 10. In a joint venture with the Las Vegas Hilton. the company developed Benihana Village. a 38. 000-square-foot composite of eating houses. bars. and other amusement locales. In 1972. the company grossed $ 12 million and the Harvard Business School selected Benihana of Tokyo as a instance survey of an entrepreneurial success narrative. With concern traveling so good. Rocky Aoki could give clip to his other involvements which included racing balloons and motorboats. roll uping points runing from vintage autos to slot machines and larning backgammon. â€Å"Rocky wanted to play. † Joel Schwartz. the company’s president. explained in a 1989 Forbes article. To assist supervise the chain’s operations and enlargement. Aoki brought in a direction company. Hardwicke Cos. . as a spouse in 1976. The relationship lasted merely four old ages and. in 1980. Aoki ended the partnership. paying $ 3. 7 million to interrupt the contract. As Rod Willis of Management Review explained in a 1986 article. â€Å"He [ Aoki ] felt the company’s direction manner clashed with his predominately Oriental work force. and he wanted to keep control over each restaurant’s quality. † The undermentioned twelvemonth Aoki settled. without acknowledging any guilt. a Securities and Exchange Commission charge that h e had improperly traded in Hardwicke stock piece functioning as vice-president of Hardwicke. The 1980s: Ups and Downs To assist pay off the debt incurred in the split with Hardwicke. Aoki decided to take portion of the company populace. He accomplished this by holding Benihana of Tokyo ( BOT ) signifier Benihana National Corporation ( BNC ) in 1982 and so taking the latter company public the undermentioned twelvemonth. Investors paid the Miami-based BNC $ 11 for a unit dwelling of two common portions and a warrant to purchase another at $ 6. With the $ 5. 5 million raised by selling half a million of these units. BNC bought 11 eating houses from Aoki in exchange for 60 per centum of the BNC common stock and $ 2. 5 million to pay BOT’s debt. Later in the twelvemonth. BNC bought another three eating houses from BOT for $ 7 million. In malice of the new corporate construction. Benihana of Tokyo and Benihana National Corporation remained under the direction of the same group of executives. As corporate president. Joel Schwartz continued to supervise the twenty-four hours to twenty-four hours operation of both companies. Aoki. who served as president of both entities. retained 51 per centum of the common stock in BNC and kept approximately 30 eating houses in the in private held BOT. Aoki developed new constructs for the Benihana nutrient concatenation but he besides continued to play hard. going a championship-level backgammon participant and puting a universe record in off-shore motorboat racing. The Double Eagle V. a 400. 000 cubic-foot gas balloon. displayed the Benihana logo as it became the first crewed balloon to successfully traverse the Pacific Ocean. with Aoki as one of the crew members. One of Aoki’s new constructs was Benihana National Classics. a line of Chinese epicures frozen nutrients. introduced in 1984 and sold in supermarkets. Chinese culinary art was chosen when the company found that Nipponese nutrient didn’t freezing good. Within a twelvemonth the Classics were the best-selling Oriental frozen nutrients in the United States. with gross revenues in one one-fourth entirely making more than $ 40 million and net incomes mounting to over $ 4 million. The company’s stock took off. traveling every bit high as $ 21. 50 in 1985. In December of that twelvemonth. Restaurant and Institution magazine named Benihana of Tokyo the most popular family-style eating house in America. At that clip. Benihana of Tokyo and Benihana National together operated or franchised eating houses in 60 locations. from Seattle to New Jersey. functioning a sum of 25. 000 clients a twenty-four hours. Benihana National’s frozen nutrient success rapidly attracted the attending of major nutrient companies. When Campbell Soup and Stouffer’s began offering their ain lines of Oriental frozen nutrients. nevertheless. Benihana couldn’t compete. The company lost $ 11 million on frozen nutrients between 1985 and 1987 and eventually sold the concern. for $ 4. 5 million. to the little company that had been bring forthing the dinners for them. Frozen nutrient. nevertheless. was non Aoki’s merely new thought. In 1985. Benihana National opened its first seafood eating house. The Big Splash. merely North of Miami. Aoki believed the sea would be the primary provider of nutrient in the hereafter. and. borrowing an thought from a Malayan fish market. came up with the construct of a seafood marketplace/restaurant. Customers could take from 100s of assortments of fresh seafood. make up ones mind how they wanted it cooked. and watch it being prepared. The thought was so popular ab initio that a 2nd Big Splash was opened. The seafood eating houses shortly experienced trouble. nevertheless. registering losingss of $ 2. 7 million during 1987. The broad assortment of options ran wholly counter to the tight focal point and minimum waste of the Benihana chophouses. At the Miami location. the bulk of clients were retired persons who resented the high monetary values and preferred to eat fish they were familiar with. â€Å"All we sold was pink-orange and ruddy center. † Aoki told Eric Schmukler in a March 1989 Forbes article. The company closed its Large Splash mercantile establishments in March 1988. The 1988 financial twelvemonth was a difficult 1 for Benihana. as the company recorded a loss of about $ 7 million. Despite the company’s fiscal jobs with Classicss and Big Splash. the Benihana eating houses themselves were still popular. By the terminal of financial 1989. the publically owned Benihana National Corp. reported net incomes of some $ 1. 8 million on gross revenues of $ 34 million at its 20 eating houses. with Aoki’s privately-held Benihana of Tokyo taking in similar grosss. 1990-94: Making a Turnaround Rocky Aoki kicked off the new decennary by opening a gallery in one of the Miami Benihana eating houses to expose a part of what was going known in the art universe as the Rocky Aoki Collection. Having spent more than a twelvemonth consolidating his diverse aggregations. Aoki told Antiques A ; Collecting. â€Å"I think it’s a natural to hold a gallery here. More than 90. 000 people eat in this eating house every twelvemonth ; why non supply them with something beautiful to look at. non to advert purchase. if they so desire. † In a 300-square-foot infinite that had been the restaurant’s gift store. diners could see etchings by Icarts. lamps by Tiffany and Handel. and bronzes by Remington. The promotion about Aoki’s aggregation helped generate concern for the eating house. and overall company grosss continued to turn. Net incomes. nevertheless. were less than a million dollars a twelvemonth. and BNC stock fell below $ 1 a portion. Angry at the state of affairs. some stockholders sued. As Marilyn Alva reported in a 1992 Restaurant Business article. the stockholders claimed Aoki and his direction squad were in a struggle of involvement by pull offing the two companies. The plaintiffs further maintained that Benihana direction had misappropriated the assets of Benihana National Corporation. go throughing them through Benihana of Tokyo for their personal benefit. The stockholders. nevertheless. were finally unsuccessful in seeking to take control of the company off from Aoki. Meanwhile. Benihana direction took advantage of a health-conscious American public’s turning involvement in Nipponese nutrient and amusement. With the ticket line. â€Å"We have been the eating house of the ’90s since the ’60s. † Aoki and Schwartz instituted a major advertisement run emphasizing the fact that Benihana had ever offered healthful nutrient. Soon afterwards. in 1993. the Atlanta Benihana of Tokyo eating house added an 18-seat sushi saloon and 35-seat Karaoke dining room to pull more clients on weekday darks. Despite the higher labour and nutrient costs associated with sushi. the company reported an addition in beverage gross revenues. and a batch of sampling of the $ . 99 sushi pieces by people waiting to eat at the traditional teppanyaki tabular arraies. Learning from its experience a decennary earlier. in 1994 Benihana National Corp. decided to acquire into the frozen nutrient concern once more. This clip. nevertheless. by come ining into a licensing understanding with Campbell Soup Co. . the company hooked up with a major seller instead than seeking to vie with the large names. The new merchandise was a line of frozen stir-fry kits having the Benihana hallmark. The dinners served six people and sold for approximately $ 8. 00. As Peter McMullin. an analyst with Southeast Research Partners. told Florida Review. Internet. â€Å"This clip the scheme makes sense because it is associating with a high profile nutrient company to assist beef up the distribution side and countervailing the razor-thin borders of retail by fabricating with a low cost manufacturer like Campbell. † By the terminal of the financial twelvemonth. grosss were over $ 70 million. with net incomes up 41 per centum to $ 2. 4 million. 1995 and Beyond: A New Company At the beginning of 1995. Benihana National announced it would purchase Aoki’s 21 Benihana of Tokyo eating houses on the U. S. mainland. along with the U. S. rights to the Benihana hallmark. for about $ 6. 15 million. On May 16. a freshly created subordinate. Benihana Inc. . acquired the BOT eating houses and. through a amalgamation. at the same time acquired Benihana National. BNC stockholders received one portion in the new keeping company for each of their portions of Benihana National. Aoki continued to function as president of the new company and Schwartz as president. Benihana Inc. now owned or licensed the 43 Benihana eating houses in the Continental United States along with a franchise in Honolulu. It besides had the rights to develop or licence Benihana eating houses in Central and South America and the Caribbean Islands. Aoki kept private his Benihana of Tokyo eating houses in Hawaii. Britain. and Thailand. During 1995. the new company took several stairss to pull more clients. Benihana introduced weekend tiffin service and. following the success in Atlanta. opened sushi bars in seven locations. The company besides instituted a national Karaoke competition for its frequenters. In the autumn. the company opened its first smaller format unit. called the Benihana Grill. in Sacramento. At 3. 800 square pess. the Grill format was less than half the size of the traditional Benihana. and enabled the company to open units in smaller locations. peculiarly in urban countries. Schwartz had been polishing this format since 1989 as an option to the company’s more common free-standing. particular usage eating house edifices. The Benihana Grill was designed to suit 10 to 12 teppanyaki tabular arraies. compared to the 18 tabular arraies in the typical Benihana. Analyst Peter McMullin remarked. â€Å"Initial indicants are promoting even before the expansive gap. With the lower capital costs of a bout $ 500. 000 versus a stand-alone eating house cost of $ 2 million. this could go an tremendous growing vehicle for Benihana. † The new hours and offerings helped increase guest counts in bing eating houses by 8. 7 per centum and same shop gross revenues by an norm of 7. 7 per centum for financial 1996. This rise. plus the add-on of the Benihana of Tokyo eating houses and the new Benihana Grill. resulted in one-year grosss of over $ 81 million. Benihana’s growing came chiefly from increased traffic in its bing eating houses. and the company continued to back up that scheme. Early in 1996. in an attempt to derive a larger portion of the cultural market. the company launched Spanish-language telecasting advertizements in Miami and Los Angeles. In May. Benihana kicked off a biennial. $ 5 million ad run. concentrating on the amusement value of teppanyaki cookery. â€Å"We want to convey the Benihana name to a different audience. † company president Joel Schwartz told Nation’s Restaurant News in a May 6. 1996 article. â€Å"The ads show that Benihana is a topographic point the full household can come to and hold a good time–a topographic point they will see the chef perform and somersault runt. † Individual eating houses besides developed advanced selling techniques. A visit and repast at the Benihana in Bethesda. Maryland. for illustration. is one of the activities in the county’s socie tal surveies curriculum for 3rd graders larning about Japan. The company did non depend wholly on its bing eating houses for growing. During 1996. it besides signed rentals for several more Benihana Grills and expanded its franchise operations. including eating houses in Bogota. Columbia. and Aruba. Netherlands Antilles. Benihana’s path record of steady growing in same shop gross revenues. lifting client count. and profitableness appeared to be go oning into the late ninetiess as grosss for the first half of financial 1997 were up over eight per centum from the twelvemonth earlier. Further Reading: Alva. Marilyn. â€Å"Very Rocky Business: Aoki Besieged by Shareholder Suits. † Restaurant Business. February 10. 1992. â€Å"Benihana Buying Founder Aoki’s Units. † Nation’s Restaurant News. January 16. 1995. p. 14. â€Å"Benihana Net incomes Rise 67 % for First Nine Months of Fiscal ’95. † Nation’s Restaurant News. February 12. 1996. p. 12. â€Å"Benihana Testing Stir-Fry Kits. † Supermarket News. October 17. 1994. p. 28.