Efficient space use decreased labor costs and rent
By eliminating the need for a conventional kitchen with the hibachi table arrangement, Benihana of Tokyo can give an unusual amount of attentive service and keep labor cost to 10%-12% of gross sales (that of typical service restraint is 34%-42%). Eliminating the conventional kitchen also increased the floor availability. Only about 22% of the total space of a unit is back of the house, including preparation areas, dry and refrigerated storage, employee dressing rooms, and office space. Normally, a restaurant requires 30% of its total space as back of the house. In addition, efficient use of space decreases rent. Because of the importance of lunchtime business, Benihana had one basic criterion for site selection – high traffic. Most units are located in a predominantly business district, but rent normally runs 5%-7% of sales for 5,000-6,000 square feet of floor space. Rent of typical service restaurant is between 4.5%-9% of sales. Simple menu decreases food costs
Reducing the menu to only three simple Middle American entrees - steak, chicken, and shrimp – was able to decrease waste and cut food costs to between 30% and 35% of food sales. Normal food costs are between 38% and 48%. Simple management saves management costs
By carrying a simple management structure of each restaurant, it maintains management costs at 4% of gross sales. Normal management costs are between 2% and 6%. It had a manager, an assistant manager, and two or three front manager. Bar/lounge area made money
Benihana provides with beverages at its bar/lounge which has one third of total seats. The beverage costs averaged 20% of beverage sales. They are more profitable than food sales. Mixed customers are having fun in one space, and Benihana used space efficiently and made money.