Presented By Group 1

Anubhav Singh Tomar- 21021141026

Aditya Raut- 21021141010
Felix Joseph-21021141047
Nitesh Bharadwaj-21021141089

formar olympic wrestler Rocky aoki found that American were deeply
mistrustful about the exotic food and also he discovered that people
enjoy watching their food being prepared.
Rocky earned money and knowledge by working washing dishes,
driving an ice cream truck, and acting as a tour guide and also spent
three years in systematic analysis of the U.S. restaurant market.
With all his learnings and capital of $30000 ( $20000 Debt) started the
first unit of Benihana on the west side of America in 1963.
The origin of Benihana of Tokyo actually date back to 1935.when
Yunosuke Aoki (Rocky’s father) opened the first of his chain of
restaurants in Japan.
the elder Aoki(papasan) was the first who incorporated the hibachi
table concept into his operations.
Units Expansion-
Rocky analysed that the number one problem of the restaurant
industry in the United States is the availability and cost of labor.
He used the Hibachi table of arrangement to provide the attentive
service while keeping the labor cost to 10%-12% of gross sales
The occupation expenses was comparatively low because 22% of the
total space of a unit is back of the house while normally a restaurant
requires 30% of its total space as back of the house.
Only three simple Middle American entrees: steak, chicken, and
shrimp.
He focused on historical authenticity. The walls, ceilings, beams,
artifacts, and decorative lights of a Benihana are all from Japan.
After the success in the west side, he opened the new unit in the east
side to cater the demand overflow.
 The Third unit was openend in the Chicago that proved as the largest money-maker
for the company and with gross sales of 1.3 million per year.
The fourth unit was in San Francisco and the fifth was a joint venture in Las Vegas
in 1969. By this time, hundreds of people were asking for franchises.
After selling 6 franchise Rocky realised that that it would be much more to his
advantage to own his units rather than franchise them.

Reasons to stop Franchising -

1. The franchises were bought by investors, none of whom had any restaurant
experience.
2. Difficulty for American investor to relate with native Japanese staff.
3. Control was considerably more difficult to maintain with a franchisee than a
company employee manager.
Initially the there was a tiny var with no lounge area but rocky found that
it was insufficient and he doubled the bar space/lounge area.
His third Manhattan operation, called Benihana Palace, opened in 1970.
Here, the bar/lounge area was enormous, even in ratio to size.
The center of attraction of Benihana was the teppanyaki table. Each table
accommodated eight diners.
The average turnover at the teppanyaki table was an hour, and up to an
hour and a half in slow periods.
chef used to prepare the food dramatically to provide the fun element by
their service.
They served the full dinner with the combination steak, filet mignon,
chicken with the shrimp as appetizer.
Site Selection
Benihana had one basic criterion for site selection--high traffic.
Locations were chosen as per both lunch time and dinner time.
Rent normally ran 5%-7% of sales for 5,000-6,000 square feet of floor space.

Training
All were young, single, native Japanese and all were certified
3-6 months course of English language, American manners and Benihana form of
cooking, which was mostly showmanship.
There was also a traveling chef who inspected each unit periodically and was involved in
the grand opening of new units.
Some were well paid in a tangible sense, a large part of the compensation was
intangible, based on job security and a total commitment to the well-being of its
employees.
turnover of personnel within the United States was very low and most did eventually
return to Japan
Organization and Control
Every restaurant had a manager (salary of
$15,000/year), an assistant manager ($12,000/year),
and two or three hosts ($9,000/year).
All managers reported to the manager of operations
Allen Saito who, in turn, reported to Bill Susha,
vice president in charge of operations and business
development.
Future Expansion & Challenges
Benihana tried Franchising
Franchisees were business people looking for investment opportunities.
Their uniqueness made it difficult for new franchise owners & their employees.
So, they decided to own & operate their franchisees themselves.
Limited to opening only 5 units per year.
Staff - requires approximately 30 Asians.
Cost - $300,000 for opening 1 unit.

Ways of Expansion
Franchisee - but very unsatisfactory
First expand to major cities like Atlanta, Dallas, St. Louis & use these to expand to suburbs
Investment from a latge international banking organization - but they had to give up a lot of
control they had in the organization.
Use locally available materials to create the same effect as it creates when they use 100%
authentic mateirals imported from Japan
Areas to Expand
United States
Primary Areas - Atlanta, Dallas, St. Louis
Secondary Areas - Harrisburg, Pennsylvania, Portland, Oregon, Cincinnati, Indianapolis
The volume will be less, but enormous profits & less headache
Suburbia
Further penetration to existing markets
Overseas & Mexico - Joint Ventures
Toronto, Canada - Royal York Hotel
Second is a signed agreement for a new unit in Mexico, and these units would be based for operation
throughout Mexico.
Third is extraterritorial arrangements with David paradise Ltd.
Diversification plans-
Agreement with the firm for producing a line of Japanese food products under the Benihana label
for retail sale.
Changes in the operation to appeal to the younger generation.
Trying out QSR.
 Problems with Benihana -
• What exactly is Benihana selling? Food, atmosphere, hospitality?

• Whether the firm should emphasise restaurant operations only?