SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-K

   [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

                 For the Fiscal Year Ended March 30, 1997

                                    or,

[  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                            EXCHANGE ACT OF 1934

                        Commission File No. 0-12644

                                Benihana Inc.
           (Exact name of registrant as specified in its charter)


                     Delaware                           65-0538630
           State or other jurisdiction of           (I.R.S. Employer
           incorporation or organization)           Identification No.)


           8685 Northwest 53rd Terrace, Miami, Florida          33166
           (Address of principal executive offices)           (Zip Code)

     (Registrant's telephone number, including area code): (305) 593-0770

        Securities  registered  pursuant to Section 12(b) of the Act:

                                    None

        Securities  registered  pursuant to Section 12 (g) of the Act:

                 Common  Stock,  par  value  $.10 per share
               Class A Common Stock, par value $.10 per share
                       Preferred Share Purchase Right

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.

                             Yes  X      No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of May 16, 1997,  3,557,366  shares of Common Stock and  2,516,300  shares of
Class A Common Stock were  outstanding,  and the  aggregate  market value of the
common  equity  of  Benihana  Inc.  held  by  non-affiliates  was  approximately
$31,728,170.

                  DOCUMENTS INCORPORATED BY REFERENCE

Portion of the  Registrant's  Annual Report to  Stockholders  for the year ended
March 30, 1997 are incorporated by reference in Parts I and II.

Portion of the  Registrant's  Proxy  Statement for the Annual Meeting to be held
July 31, 1997 are incorporated by reference in Part III.

                                  1

<PAGE>



Item 1.  Business

Benihana Inc. (The "Company") owns and operates 38 Benihana and Benihana Grill
dinnerhouse restaurants and licenses twelve others.

Organization

Effective May 15, 1995,  the Company  became the successor to Benihana  National
Corp.  ("BNC")  through  the  merger  (the"Merger")  of BNC and a  wholly  owned
subsidiary of the Company.  Simultaneously with the Merger, the Company acquired
from Benihana of Tokyo, Inc. ("BOT"), a corporation  privately owned by Rocky H.
Aoki, the Company's Chairman of the Board and founder of the Benihana restaurant
chain,  all  of  BOT's  Benihana  restaurants  (the  "BOT  Restaurants")  in the
continental  United  States,  consisting  of 17  company-owned  and  5  licensed
locations. The Merger and asset acquisition (collectively, the "Reorganization")
were accounted for in a manner similar to a pooling of interests.  References to
the " Company" in this report include BNC, the Company's predecessor.

BNC had been  organized in 1982 by BOT in connection  with BNC's initial  public
offering.

General

The Company has the right to own, develop or license Benihana and Benihana Grill
restaurants in the United States  (subject to certain rights granted to BOT with
respect to the State of Hawaii)  Central  and South  America  and the  Caribbean
Islands.

A description of the Company-owned  and licensed  restaurants is set forth below
under "Properties".

Sales by the Company's owned restaurants were approximately  $84,415,000 for the
fiscal year ended March 30, 1997, as compared to  approximately  $81,094,000 for
the prior fiscal year.

Benihana Format and Menu

The Benihana  restaurants  feature the teppanyaki  style of Japanese  cooking in
which the food is prepared  by a Benihana  chef on a grill which forms a part of
the table at which it is served. The Benihana  restaurants  feature a distinctly
Japanese  design  creating an authentic  atmosphere for its guests.  Most of the
Company's  Benihana  restaurants  are  open  for  both  lunch  and  dinner.  The
restaurants  have a limited menu  offering a full course meal  consisting  of an
appetizer,  soup,  salad,  tea,  and an entree of steak,  seafood,  chicken or a
combination  of them.  Specific  menu  items  may be  different  in the  various
restaurants  depending upon the local  geographic  market.  The servings are all
portion controlled to provide consistency in quantities served to each customer.
Alcoholic  beverages,  including  specialty mixed drinks,  wines, beers and soft
drinks are  available.  The average  check size per person was $22.42 during the
year ended 1997. During the fiscal year ended March 30, 1997,  beverage sales in
both the lounges  and dining  rooms  accounted  for  approximately  20% of total
restaurant  sales.  The Company offers sushi both at the teppanyaki grill and at
separate sushi bar areas within most restaurants.

Generally,  an  entire  teppanyaki  table is  filled  at one  time.  The chef is
assisted in the service of the meal by the waitress or waiter who takes beverage
and food orders.  An entire  dinnertime  meal takes  approximately  one hour and
thirty minutes.

In October 1995, the Company opened its first  Benihana  Grill  restaurant.  The
Benihana Grill is a smaller version of the typical  Benihana  restaurant that is
suitable  for  smaller  markets  and for strip  shopping  centers.  The  Company
believes  that the Benihana  Grill  provides  greater  potential for unit growth
because  the  costs  to  design,  construct  and  open  the  Benihana  Grill  is
approximately one-third of the cost of a standard sized Benihana restaurant.

Of the 38 owned Benihana and Benihana Grill restaurants,  27 are located in free
standing, special use restaurant buildings, three in shopping centers, and eight
in office or hotel building complexes.  The free standing restaurants were built
to the  Company's  specifications  as to size,  style and  interior and exterior
decor. The other locations were adapted to the Benihana interior decor. The free
standing units, which are generally one story buildings,  average  approximately
8,000 square feet and are  constructed  on a lot of  approximately  1.25 to 1.50
acres with parking for 100 to 125 cars. The shopping center, office building and
hotel based Benihana restaurants are of similar size,  but  differ  somewhat  in
appearance  from  location  to  location  in order to  conform  to the  existing
buildings.  The designs for the Benihana Grill calls for between 3,500 and 4,000
square feet and 10 and 12 teppanyaki  tables. A typical Benihana  restaurant has
eighteen teppanyaki tables. The Benihana restaurants seat from 86 to 178 persons
in the dining rooms (at the  teppanyaki  tables which seat six to ten customers)
and 8 to 120 persons in the bar lounge areas.

                                  2

<PAGE>



Operations and Control of Benihana Restaurants

The  Benihana  and  Benihana  Grill  restaurants  are  centrally  managed by the
Executive Vice President - Restaurant  Operations.  The  restaurants are divided
among five geographic regions, each managed by a regional manager.

Each  Benihana  restaurant  has a  manager  and one or more  assistant  managers
responsible for the operation of the restaurant, including personnel matters,
local inventory purchasing,  maintenance of quality control standards,
cleanliness and service.

The Company  uses various  incentive  compensation  plans  pursuant to which key
restaurant  personnel  share in the  results of  operations  at both a local and
company-wide level.

Specific strict  guidelines as documented in restaurant  operations  manuals are
followed  to assure  consistently  high  quality in  customer  service  and food
quality from location to location. Operating specifications are used for quality
of  ingredients,  preparation  of food,  maintenance  of premises  and  employee
conduct and are  incorporated  in manuals  used by the  managers  and  assistant
managers.  Food  products and portion  sizes are  regularly  and  systematically
tested for quality and compliance with the Company's standards.  Certain seafood
items are purchased under long-term  contracts for most of the restaurants under
which a certain  quantity is  purchased at a specific  price.  Most of the other
food  products  are  purchased  in  local  markets.  Substantially  all  of  the
restaurant  operating  supplies are purchased  centrally and  distributed to the
restaurants from the Company's warehouse or one of two bonded warehouses.

The chefs are trained in the Teppanyaki style of cooking and customer service in
training  programs lasting from eight to twelve weeks. A portion of the training
is spent working in a Benihana  restaurant  under the direct  supervision  of an
experienced head chef. The program includes  lectures on the Company's method of
restaurant  operations  and  training  in  both  table  side  and  kitchen  food
preparation  as applied in  Benihana  restaurants.  Manager  training is similar
except that the manager  trainee is given in-depth  exposure to each position in
the  restaurant,  from  busboy to  maitre'd  to  manager.  Other  categories  of
employees  are trained by the manager and  assistant  manager at the  restaurant
itself.  Ongoing  continuing  education  programs  and seminars are provided to
restaurant  managers  and chefs to  improve  restaurant  quality  and  implement
changes in operating policy or menu items.

The  Company  provides  restaurant  managers  with  centralized   financial  and
management  control systems through use of data processing  information  systems
and prescribed reporting procedures.

Each  restaurant  forwards sales  reports,  vendor  invoices,  payroll and other
operational  data to the home office on a weekly and four week period basis. The
Company utilizes this information to centrally monitor sales, product, labor and
other  costs and to prepare  periodic  financial  and  management  reports.  The
Company believes that its centralized  accounting,  payroll and human resources,
cash  management  and  information  systems  improve  its ability to control and
manage its operations efficiently.

Marketing

The Company utilizes television, radio, billboard and print media to promote the
restaurants.  The  advertising  programs  are  tailored to each local market and
television advertising is concentrated around certain specific dates to increase
efficiency.  The  advertising  program is designed to emphasize  the  inherently
fresh and healthful  aspects of a Benihana meal and the  entertainment  value of
the food preparation at the table. The entertainment value of the chef preparing
the meal is emphasized to  distinguish  the Benihana  style of food  preparation
from all other restaurant concepts.

Licensing

The Company  offers  licenses in markets  where it considers  expansion to be of
benefit to the Benihana system.

Licensees bear all direct costs involved in the  development,  construction  and
operation of their restaurants.  The Company provides licensees support for site
selection,  prototypical  architectural plans,  interior and exterior design and
layout,  training,  marketing and sales techniques and opening  assistance.  All
licensees are required to operate their  restaurants in accordance with Benihana
standards  and  specifications  including  menu  offerings,   food  quality  and
preparation.

The current standard licensing  agreements provide for payment to the Company of
a non-refundable  license fee of $30,000 to $50,000 per restaurant and royalties
of 3% to 6% of sales.

                                  3

<PAGE>



The Company presently licenses Benihana  restaurants in Las Vegas, Nevada; Reno,
Nevada;  Beverly Hills,  California;  Seattle,  Washington;  Key West,  Florida;
Harrisburg;  Pennsylvania;  Tracy, California;  Modesto,  California;  Honolulu,
Hawaii;  Bogota,  Colombia;  Little Rock,  Arkansas and the Island of Aruba.  To
comply  with the terms of these  licenses  entered  into by the  Company  in the
United States,  the Company is prohibited  from opening  additional  restaurants
within  certain areas (the  "Licensee  Zones") in which the  Company's  existing
licensees have the exclusive right to open additional Benihana  restaurants.  In
general,  such license  agreements  currently  provide for an initial payment to
Benihana with respect to each new restaurant  opened by a licensee  (although in
certain cases,  no license fee is required) and continuing  royalty  payments to
the licensor based upon a percentage of a licensee's  gross sales from each such
restaurant throughout the term of the license.

In connection with the  Reorganization,  BOT was granted an exclusive license to
own and  operate  Benihana  restaurants  in the State of Hawaii,  including  the
restaurant  currently  operated by BOT in Honolulu.  BOT's license for Hawaii is
royalty free with respect to all restaurants in Hawaii beneficially owned by Mr.
Aoki.

BOT continues to own the rights to the Benihana name and  trademarks  outside of
the United  States,  Central and South  America and the islands of the Caribbean
Sea. Except for certain obligations accrued in favor of the Company with respect
to managerial  services that may from  time-to-time  be provided by the Company,
the Company has no financial interest in any restaurant operated by BOT.

Restaurant Expansion

The Company intends to open additional owned and licensed  Benihana and Benihana
Grill  restaurants  as  specific  opportunities  arise and as  permitted  by the
Company's financial resources.  In evaluating  prospective restaurant sites, the
Company analyzes demographics  (including income levels, family  characteristics
and other factors),  local economic conditions,  visibility and accessibility of
the  site,  rate of  growth,  complementary  businesses,  traffic  patterns  and
proximity to major  thoroughfares  and places of public  concentration,  such as
shopping  malls and  offices.  Management  estimates  the cost of  building  and
equipping a  restaurant  to range  between  $650,000 and $750,000 for a Benihana
Grill and $1,800,000 and $2,000,000 for standard Benihana  restaurant  depending
on size and location.  Such costs do not include the  acquisition of land as the
Company  generally  leases the real  property  underlying  restaurant  premises,
although  purchases of real property may be effected if favorable  opportunities
arise.

The development,  construction and opening of any new restaurant is subject to a
number of  uncertainties,  principal  among which are (I) locating and competing
for appropriate  restaurant sites, (ii) obtaining leases at acceptable terms for
such sites,  (iii) obtaining  necessary  construction  financing upon acceptable
terms should  internal cash resources be  insufficient  (iv) hiring and training
sufficient  supervisory and operating  personnel,  and (v) receiving  liquor and
food restaurant operating licenses, requisite zoning, environmental,  health and
similar  regulatory  approvals.  Additionally,  unforseen  construction or other
delays  could  postpone the  restaurant's  opening.  Some of these  elements are
dependent upon  circumstances  over which the Company does not have control and,
accordingly,  there can be no assurance as to the time period for the  Company's
anticipated development of additional restaurants.

Trade Names and Service Marks

Benihana is Japanese  for "red  flower".  In the United  States  "Benihana"  and
"Benihana of Tokyo" names and "flower" logo, which Management  believes to be of
material importance to the Company's business,  are owned by the Company and are
registered in the United States Patent and Trademark  Office  ("Patent  Office")
and certain foreign countries.

Employees

At March 30,  1997,  the Company  employed  1,823  persons,  of which 1,777 were
restaurant employees and 46 were corporate  personnel.  Certain of the Company's
corporate  employees  perform  administrative  services  for BOT for  which  the
Company  is  reimbursed.   Most  employees,  except  restaurant  management  and
corporate  management  personnel,  are paid on an hourly basis. The Company also
employs some  restaurant  personnel on a part-time basis to provide the services
necessary during the peak periods of restaurant operations. The Company believes
its relations with its employees is good.

Competition

The restaurant business is highly competitive. The Company's restaurants compete
directly and indirectly with a large number of national and regional  restaurant
operations,  as  well  as  with  locally-owned  restaurants  of  various  types.
Competition is based upon a number of factors including food quality,  location,
personnel, attractiveness of

                                  4

<PAGE>



facilities,  name  recognition  and price  points of menu  offerings.  There are
several other companies engaged in restaurant operations or franchising programs
which have substantially  greater financial resources and a significantly higher
total sales volume than that of the Company. The restaurant industry is affected
by, among other factors, general economic conditions,  changing consumer tastes,
concerns  over  health  and  spending  habits.  The  Company  believes  that its
competitive  position  is  enhanced  by  offering a quality  food  product at an
appropriate  price with the  unique  entertainment  provided  by the chefs in an
attractive, relaxed atmosphere.

Regulation

Each of the Company's  restaurants is subject to licensing and regulation by the
health, sanitation, safety standards, fire department and the alcoholic beverage
control   authorities  in  the  state  or  municipality  where  it  is  located.
Difficulties  or failures in  obtaining  the  required  licensing  or  requisite
approvals  could  result  in  delays  or  cancellations  in the  opening  of new
restaurants. Federal and state environmental regulations have not had a material
effect on the Company's  operations,  but more stringent and varied requirements
of local governmental  bodies with respect to zoning, land use and environmental
factors could delay construction of new restaurants.

The Company is also subject to federal and state regulations regarding franchise
offering and sales. Such laws impose registration and disclosure requirements on
franchisors in the offer and sale of franchises, or impose substantive standards
on the relationship between licensee and licensor.

The Americans with Disabilities Act, (the "Act") prohibits discrimination on the
basis of disability in public  accommodations  and  employment.  The Act,  which
mandates  accessibility  standards for  individuals  with physical  disabilities
increases the cost of construction  of new  restaurants and of remodeling  older
restaurants.

The Company is also subject to the Fair Labor  Standards  Act which governs such
matters as minimum wages,  overtime and other working conditions.  A significant
portion of the  Company's  food service  personnel  are paid at rates related to
federal or state minimum  wages rates,  and  accordingly,  increases in any such
minimum wage will increase the Company's labor costs.

Seasonality

The Company's sales are not significantly affected by season.



                                   5

<PAGE>



Item 2.  Properties

Of the Company's  38-owned Benihana  restaurants,  33 restaurant  properties are
leased pursuant to leases which require either a specific monthly rental amount,
or a minimum rent and  contingent  additional  rent based upon a  percentage  of
gross sales.  Leases for the free standing  units require the Company to pay for
real estate taxes,  insurance and all repairs.  Leases for the office  building,
shopping center and hotel locations  typically require an increase in rent based
on an index (such as the consumer  price  index) or increases in the  landlord's
cost.

The following  table sets forth  certain  information  concerning  the Company's
restaurants:
<TABLE>
<CAPTION>

                                                                                                Renewal Options
                                        Approximate Seating                                    ----------------
                        Approx.     ----------------------------              Expiration Date             Years
                      Sq. Ft. of    Dining                Sushi      Date      Exclusive of    No. Of    of Each
Benihana Location      Building      Room     Lounge       Bar      Opened       Options       Options   Options
-----------------     ---------     ------    ------      -----     ------    ---------------  -------   -------
<S>                   <C>           <C>       <C>         <C>       <C>       <C>           
2100 E. Ball Rd.         8,710      160           67        36      03/17/80     03/31/05        3          5
Anaheim, CA (1)

2143 Peachtree Road      8,244      136           65        16      05/10/74     12/31/02        0          0
Atlanta [I], GA (2)

229 Peachtree St. NE     6,372      115           34        11      04/26/81     12/31/01        0          0
Atlanta [II], GA (1)

9205 S.W. Cascade        6,077      112           54        34      08/07/86     08/07/06        0          0
Beaverton, OR (1)

7315 Wisconsin Ave.      6,047      128           47                10/25/74     07/31/00        1          5
Bethesda, MD (1)

1496 Old Bayshore Hwy    8,740      160           99        27      02/28/78     01/31/03        4          5
Burlingame, CA (1)

5255 Marlton Pike        7,000      136           93        10      02/14/78     11/30/02        2          5
Pennsauken, NJ (1)
(Cherry Hill)

166 E. Superior Street   7,288      163           85                04/06/68     02/28/13        0          0
Chicago, IL (1)

50 Tri-County Pkwy       7,669      144           91                06/03/78     06/30/03        2          5
Cincinnati, OH (1)

17877 Gale Avenue        8,000      144           50        30      11/14/88     11/30/03        4          5
City of Industry, CA (1)

1989 Diamond Blvd.       8,250      144           84        18      02/12/80     02/28/05        4          5
Concord, CA (1)



(1)      Lease provides for minimum rent, plus additional rent based upon a
         percentage of gross sales.
(2)      Lease provides for fixed rent.

</TABLE>


                                   6

<PAGE>
<TABLE>
<CAPTION>


                                                                                                 Renewal Options
                                         Approximate Seating                                    -----------------   
                       Approx.      ----------------------------              Expiration Date              Years
                      Sq. Ft. of    Dining                Sushi       Date     Exclusive of     No. Of    of Each
Benihana Location      Building      Room      Lounge      Bar       Opened      Options        Options    Option
-----------------     ---------     ----       ------     ------     ------   ---------------   -------   -------
<S>                   <C>           <C>        <C>        <C>        <C>      <C>     
2074 Vallco Fashion Pk   7,937      144          45         8        07/15/80     06/30/05         0         0
Cupertino, CA (1)

12700 Park Central Pl    8,007      160         115                  01/15/76     07/31/10         1         5
Dallas, TX (2)

3295 S. Tamarac Drive    7,572      128          82        10        02/17/77     12/31/01         1         5
Denver, CO (1)

16226 Ventura Blvd.      7,790      152          64                  10/06/70     03/31/00         0         0
Encino, CA (2)

276 E. Commercial Blvd.  8,965      160          70                  06/05/70       N/A          Owned      N/A
Lauderdale-by-the-Sea,
FL

1318 Louisiana St.       6,938      128          60        12        05/09/75     05/31/99         0         0
Houston [I], TX (2)

9707 Westheimer Rd.      7,669      144         120        10        11/11/77     11/30/02         2         5
Houston [II], TX (1)

8830 Keystone Crossing   8,460      144          93                  02/08/79     02/29/04         2         5
Indianapolis, IN (1)

8727 So. Dixie Hwy.      8,700      122          66        15        03/24/89     12/31/03         0         0
Miami,  FL (2)
(Kendall)

747 E. Butterfield Rd.   9,200      168          51                  04/13/85       N/A          Owned      N/A
Lombard, IL

1510 Lake Shore Court    7,572      128          88                  07/20/78     07/31/03         2         5
Louisville, KY (1)

2105 Northern Blvd.      8,252      144          88        75        12/15/78     08/31/03         2        10
Munsey Park, NY (1)
(Manhasset)



(1)      Lease provides for minimum rent, plus additional rent based upon a
         percentage of gross sales.
(2)      Lease provides for fixed rent.

</TABLE>



                                   7

<PAGE>
<TABLE>
<CAPTION>


                                                                                                  Renewal Options
                                       Approximate Seating                                      ------------------
                       Approx.      ----------------------------              Expiration Date              Years
                      Sq. Ft. of    Dining                Sushi       Date     Exclusive of     No. Of     of Each
Benihana Location      Building      Room      Lounge      Bar       Opened       Options       Options    Option
-----------------     ----------    ------     ------     -----     --------  ---------------   -------    -------
<S>                   <C>           <C>        <C>        <C>       <C>       <C>
14160 Panay Way          4,840        96         66         6       03/24/72     05/14/01          0          0
Marina Del Rey, CA (1)

912 Ridgelake Blvd.      8,680       144         78        11       10/16/79     10/31/04          2          5
Memphis, TN (1)

1665 NE 79 Street        8,938       178         86        42       09/27/73       N/A           Owned       N/A
Miami Beach, FL

120 East 56 Street       3,859        86         24                 05/15/66     12/31/04          0          0
New York, NY (2)

47 West 56 Street        7,340       112         59                 06/16/73     03/31/98          0          0
New York, NY (1)

4250 Birch Street        8,275       144         72        26       03/14/78     03/31/02          5          5
Newport Beach, CA (4)

1751 Hotel Park Blvd.    8,145       128         85         7       10/19/88     10/18/98          2          5
Lake Buena Vista, FL
(Orlando) (3) 

5489 E. Sunrise Blvd.    3,798        88          8         5       10/12/95     08/31/05          0          0
Citrus Heights, CA
(Sacramento)(1)

165 SW Temple Bldg. 1    7,530       120         72        10       04/14/77     03/31/06          2          5
Salt Lake City, UT (1)

477 Camino Del Rio So.   7,981       144         68        23       05/10/77     10/31/01          2          5
San Diego, CA (1)

1737 Post Street         7,990       140         45                 12/15/80     12/31/00          0          0
San Francisco, CA (1)

1200 E. Higgins Road     8,388       160         48                 07/26/92       N/A           Owned       N/A
Schaumburg, IL

840 Morris Turnpike     11,500       144         56        56       10/31/76     03/31/01          0          0
Short Hills, NJ (2)

3602 SE Ocean Blvd.      8,485       160         69        57       02/01/77         N/         Owned        N/A
Stuart, FL

21327 Hawthorne Blvd.    7,430       128         63        28       05/09/80     05/31/05          2          5
Torrance, CA (1)


(1)      Lease provides for minimum rent, plus additional rent based upon a
         percentage of gross sales.
(2)      Lease provides for fixed rent.
(3)      Rent is based on a percentage of sales.
(4)      Rent is fixed plus a percentage of profits.

</TABLE>




                                   8

<PAGE>




The Company  leases  approximately  10,100  square feet of space for its general
administrative offices in Miami at an annual rental of $169,757 and 8,000 square
feet for a warehouse  also in Miami at an annual  rental of $24,335.  The leases
expires May 31, 1999 and October 31, 1997, respectively.

Item 3.  Legal Proceedings

There are no  material  legal  proceedings  to which the  Company  or any of its
subsidiaries is a party other than ordinary litigation incidental to the conduct
of the Company's business.

Item 4.  Submission of Matters to a Vote of Security Holders

There were no matters  submitted to a vote of security holders during the fourth
quarter.



                                   9

<PAGE>



                                PART II


Item 5.  Market for the Company's Common Stock and Related Stockholder Matters

The  information  required by this Item is  incorporated  herein by reference to
page 27 of the Company's 1997 Annual Report to Shareholders.

Item 6.  Selected Consolidated Financial Data

The  information  required by this Item is  incorporated  herein by reference to
page 1 of the Company's 1997 Annual Report to Shareholders.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

The  information  required by this Item is  incorporated  herein by reference to
pages 7 through 10 of the Company's 1997 Annual Report to Shareholders.

Item 8.  Financial Statements and Supplementary Data

The  information  required by this Item is  incorporated  herein by reference to
pages 11 through 24 of the Company's 1997 Annual Report to Shareholders.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.



                                  10

<PAGE>



                                PART III


Item 10.  Directors and Executive Officers of the Company

Directors.  The information  appearing under the caption "Election of Directors"
on pages 2 through 4 of the Company's  Proxy Statement for its Annual Meeting of
Stockholders to be held on July 31, 1997 (the "Proxy Statement") is incorporated
herein by reference.

Item 11.  Executive Compensation

The information appearing under the caption "Executive  Compensation" commencing
on page 7 of the Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The information  appearing under the caption "Security  Ownership of Management"
on pages 4 through 7 of the Proxy Statement is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

The information appearing under the captions "Certain  Relationships and Related
Transactions"  commencing  on page 11 of the  Proxy  Statement  is  incorporated
herein by reference.


                                  11

<PAGE>



                                PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      1.   Financial Statements:

              The following consolidated financial statements of the Company and
              its  subsidiaries,  which are set forth on pages 11  through 24 of
              the Company's 1997 Annual Report to  Shareholders  included herein
              as Exhibit 13, are  incorporated  herein by  reference  as part of
              this report.

              Consolidated  Balance  Sheets as of March  30,  1997 and March 31,
              1996.

              Consolidated Statements of Income for the fifty-two weeks ended
              March 30, 1997, the  fifty-three  weeks ended March 31, 1996 and
              fifty-two weeks ended March 26, 1995.

              Consolidated Statements of Stockholders' Equity for the fifty-two
              weeks ended March 30, 1997,  the  fifty-three  weeks ended March
              31, 1996 and fifty-two weeks ended March 26, 1995.

              Consolidated Statements of Cash Flows for the fifty-two weeks
              ended March 30, 1997, the fifty-three weeks ended March 31, 1996
              and the fifty-two weeks ended March 26 1995.

              Notes to Consolidated Financial Statements.

              Report of Independent Accountants.

         2.   Financial Statement Schedules:

              None.

              Supplemental Exhibit of Calculation of Earnings Per Share.

         3.   Exhibits:

              2.01         Amended   and   Restated   Agreement   and   Plan  of
                           Reorganization,  dated as of  December  29,  1994 and
                           amended  as of March 17,  1995 among  BNC,  BOT,  the
                           Company  and  BNC  Merger   Corp.   Incorporated   by
                           reference   to   Exhibit   2.01   to  the   Company's
                           Registration  Statement on Form S-4, Registration No.
                           33-88295, made effective March 23, 1995 (the "S-4").

              3.01         Certificate of Incorporation of the Company.
                           Incorporated by reference to Exhibit 3.01 to
                           the S-4 and to Exhibit 1 on Form 8-A dated
                           February 12, 1997.

              3.02         By-Laws of the Company.  Incorporated by reference to
                           Exhibit 3.02 to the S-4.

              4.01         Certificate of Designation of Rights, Preferences and
                           Terms for the Series A Convertible Preferred Stock of
                           the  Company.  Incorporated  by  reference to Exhibit
                           4.01 to the  Company's  Current  Report  on Form  8-K
                           dated May 15, 1995.

              4.02         Form of Certificate representing shares of the
                           Company's Common Stock.  Incorporated by reference to
                           Exhibit 4.02 to the S-4.

              4.03         Form of Certificate representing shares of the
                           Company's Class A Common Stock.  Incorporated by
                           reference to Exhibit 4.03 to the S-4.

              10.01        License Agreement, dated as of May 15, 1995 between
                           BNC and BOT Inc.  Incorporated by reference to
                           Exhibit 10.01 to the S-4.

              10.02        7 1/2% unsecured  Promissory  Note dated May 15, 1995
                           delivered  by  the  Company  to BOT  as  part  of the
                           consideration  for  the  Transfer.   Incorporated  by
                           reference to Exhibit 10.02 to the S-4.



                                   12

<PAGE>



              10.03        Employment Agreement dated May 15, 1995 between Rocky
                           H. Aoki and the Company.  Incorporated by reference
                           to Exhibit 10.03 to the S-4.

              10.04        Employment Agreement dated May 15, 1995 between Joel
                           A. Schwartz and the Company.  Incorporated by
                           reference to Exhibit 10.04 to the S-4.

              10.05        Promissory Note made by BOT in favor of BNC dated
                           September, 1992.  Incorporated by reference to
                           Exhibit No. 10.13 to BNC's Annual Report on Form
                           10-K for the fiscal year ended March 28, 1993.

              10.06        BNC's 1985 Employee's Stock Option Plan. Incorporated
                           by  reference  to Appendix II to BNC Proxy  Statement
                           for  its  Annual  Meeting  of  Stockholders  held  on
                           December  11,  1985.  Incorporated  by  reference  to
                           Exhibit 10.06 to the S-4.

              10.07        1994 Employees' Stock Option Plan Incorporated by
                           reference to Exhibit 10.07 to the S-4.

              10.08        Directors Stock Option Plan.  Incorporated by
                           reference to Exhibit 10.08 to the S-4.

              10.09        Employment Agreement dated January 1, 1995 between
                           Taka Yoshimoto and BNC.  Incorporated by reference
                           to Exhibit 10.09 to the S-4.

              10.10        Employment Agreement dated January 1, 1995 between
                           Michael Burris and the Company.  Incorporated by
                           reference to Exhibit 10.10 to the S-4.

              10.11        Second  Amended and  Restated  Credit  Agreement,
                           dated as of May 1, 1995, among BNC, its Subsidiaries
                           named as co-makers,  its Subsidiaries named as
                           guarantors,  the Company, First Union National Bank
                           of Florida, the successor in interest to the Federal
                           Deposit Insurance Corporation,  as receiver of
                           Southeast Bank, N.A., and First Union National Bank
                           of Florida,  as Agent for the Lenders.  Incorporated
                           by reference to Exhibit  10.11 to the  Company's
                           Annual Report on Form 10-K for the fiscal year ended
                           March 26,  1995.

              10.12        Benihana Incentive Compensation  Plan.  Incorporated
                           by reference to Exhibit 10.12 to the Company's Annual
                           Report on Form 10-K for the fiscal year ended March
                           31, 1996.

              10.13        1996 Class A Stock  Option Plan.  Incorporated  by
                           reference to Exhibit A to Benihana Inc.  Proxy
                           Statement for its Annual Meeting of  Stockholders
                           held on July 19, 1996.

              11.01        Supplemental  Schedule - Calculation of Earnings Per
                           Share.

              13.01        Portions of Annual  Report to  Stockholders  for the
                           year ended March 30,  1997.

              22.01        List of  Subsidiaries.  Incorporated  by reference
                           to Exhibit No. 22.01 to the S-4.

              23.01        Consent of Deloitte & Touche LLP.

              23.02        Consent of Deloitte & Touche LLP.    

(b)      Reports on Form 8-K.

         None.

                                  13

<PAGE>



                              SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date:    May 23, 1997           BENIHANA INC.

By:          /s/ Joel A. Schwartz
          Joel A. Schwartz, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on the date indicated  above by the following  persons on behalf
of the registrant and in the capacities indicated.


Signature                       Title                             Date


/s/ Rocky H. Aoki               Chairman of the                   May 23, 1997
-----------------------         Board and Director
Rocky H. Aoki                   (Principal Executive Officer)
                                

/s/ Joel A. Schwartz            President and                     May 23, 1997
-----------------------         Director (Principal
Joel A. Schwartz                Executive Officer) 
                                            

/s/ Taka Yoshimoto              Executive Vice President -        May 23, 1997
-----------------------         Restaurant Operations
Taka Yoshimoto                  and Director      
                                               

/s/ Irwin K. Chapman            Director                          May 23, 1997
-----------------------
Irwin K. Chapman

/s/ Robert B. Greenberg         Director                          May 23, 1997
-----------------------
Robert B. Greenberg

/s/ John E. Abdo                Director                          May 23, 1997
-----------------------
   John E. Abdo

/s/ Michael R. Burris           Treasurer and Vice                May 23, 1997
-----------------------         President of Finance
Michael R. Burris               (Chief Financial Officer and
                                Principal Accounting Officer)
                                            

/s/ Darwin C. Dornbush          Secretary and Director            May 23, 1997
-----------------------
Darwin C. Dornbush



                                   14

<PAGE>
<TABLE>

EXHIBIT 11.01

                                   BENIHANA INC.
                      CALCULATION OF PRIMARY EARNINGS PER SHARE

<CAPTION>
                                                               YEAR ENDED 
                                                               ----------
                                                    1997           1996           1995
                                                 ----------     ----------     ----------
<S>                                              <C>            <C>            <C>
Weighted average number of
  shares outstanding                              6,017,281      5,821,191      5,732,151

Common Stock issued to BOT in
  connection with the reorganization                                               76,905

Dilutive effect of warrants
  outstanding                                                      118,629         24,732

Dilutive effect of stock options
  outstanding used in calculation
  of earnings per share                              52,041         62,884         32,679
                                                 ----------     ----------     ---------- 
                                                  6,069,322      6,002,704      5,866,467
                                                 ==========     ==========     ==========

Net income                                       $4,947,000     $4,410,000     $2,751,000

Pro forma effect of dividend on
  Preferred Stock issued in
  connection with the reorganization               (120,000)      (120,000)      (120,000)

Pro forma interest on debt incurred to
  finance acquisition of BOT
  restaurants                                                      (36,250)      (261,000)

Pro forma interest on debt issued to
  BOT to finance acquisition of BOT
  restaurants                                                       (6,806)        49,000)

Income tax effect on interest on
  acquisition debt indebtedness                                     17,222        124,000
                                                 ----------     ----------     ----------

Pro Forma Net Income                             $4,827,000     $4,264,166     $2,445,000
                                                 ==========     ==========     ==========

Primary Earnings Per Share                             $.80           $.71           $.42
                                                       ====           ====           ====


                      CALCULATION OF FULLY DILUTED EARNINGS PER SHARE

                                                               YEAR ENDED
                                                               ----------
                                                    1997           1996           1995
                                                 ----------     ----------     ----------
Weighted average number of
  shares outstanding                              6,017,281      5,821,191      5,732,151

Convertible Preferred Stock                         300,000        300,000

Common Stock issued to BOT in
  connection with the rorganization                                                76,905

Dilutive effect of warrants
  outstanding                                                      118,629         24,732

Dilutive effect of stock options
  outstanding used in calculation of
  earnings per share                                 52,041         62,884         32,679
                                                 ----------     ----------     ----------

                                                  6,369,322      6,002,704      5,866,467
                                                 ==========     ==========     ==========

Net Income                                       $4,947,000     $4,410,000     $2,751,000
                                                 ==========     ==========     ==========

Fully Diluted Earnings Per Share                       $.78           $.70           $.42
                                                       ====           ====           ====

</TABLE>

                                  15

<PAGE> 

EXHIBIT 13.01 - SELECTED FINANCIAL DATA

The  following  table sets forth  selected  financial  data with  respect to the
Company.  This  table  should  be  read in  conjunction  with  the  consolidated
financial statements,  including the notes thereto, which are included elsewhere
in this annual report. The table reflects the number of restaurants in operation
during all or part of the indicated  years. The fiscal year ended March 31, 1996
consists of 53 weeks and all other fiscal years presented consist of 52 weeks.

The financial  data in the following  table is qualified in its entirety by, and
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto and "Management's  Discussion and Analyses of Financial  Condition
and Results of Operations."

<TABLE>
<CAPTION>


                                                                    Years Ended
                                        March 30,      March 31,      March 26,       March 27,      March 28,
                                          1997           1996           1995            1994           1993
                                        ---------      ---------      ---------       ---------      ---------
<S>                                     <C>            <C>            <C>             <C>            <C>
                                           (All dollar amounts in thousands, except per share amounts)
INCOME STATEMENT DATA

NET RESTAURANT SALES                     $84,415        $81,094        $72,772         $69,315        $64,939
OTHER INCOME                                 789            512            492             451            459
COST OF SALES AND
    RESTAURANT EXPENSES                   72,904         69,804         64,764          62,354         59,423
GENERAL AND ADMINISTATIVE
    EXPENSES                               4,217          4,801          4,841           4,167          3,943
INTEREST EXPENSE, NET                        904          1,226          1,140           1,202          1,284
PROVISION FOR CLOSED UNITS                                                                 427

INCOME BEFORE TAXES                        7,179          5,775          2,519           1,616            748
INCOME TAX PROVISION
 (BENEFIT)                                 2,232          1,365           (232)           (423)           (80)
NET INCOME                                 4,947          4,410          2,751           2,039            828
PRO FORMA NET INCOME
   AVAILABLE FOR COMMON
   SHAREHOLDERS                            4,827          4,264          2,445           1,733            522
PRO FORMA NET INCOME
   PER COMMON SHARE (1):
       PRIMARY                              $.80           $.71           $.42            $.30           $.09
       FULLY DILUTED                        $.78           $.70           $.42            $.30           $.09


BALANCE SHEET DATA                                                                                   (Unaudited)

CURRENT ASSETS                           $11,570        $ 7,727        $ 5,111         $ 4,644        $ 4,607
TOTAL ASSETS                             $40,562        $36,257        $33,722         $34,220        $35,187
LONG-TERM DEBT
    AND OBLIGATIONS
    UNDER CAPITAL LEASES                 $ 9,354        $10,904        $12,883         $10,657        $12,697
CURRENT LIABILITIES                      $ 8,454        $ 8,027        $ 8,634         $ 8,764        $ 9,768
STOCKHOLDERS' EQUITY                     $22,754        $17,326        $12,205         $14,799        $12,722

</TABLE>

(1) The pro forma net income per common  share was  computed  using the weighted
average  shares and  common  stock  equivalents  outstanding  in each year.  The
amounts  of  preferred  dividends  and  interest  expense  that  would have been
incurred  in the  fiscal  years  ended  1995,  1994 and 1993 as a result  of the
acquisition of the BOT Restaurants  have been factored in the calculation of pro
forma net income per common  share for all periods that are  presented  prior to
the acquisition. (See Note 2 to the consolidated financial statements).

                                  16

<PAGE>



Overview

The Company  continued to achieve  earnings  gains during  1997.  Income  before
income taxes  increased 24.3% to $7,179,000 in 1997 as compared to $5,775,000 in
1996 and $2,519,000 in 1995.  After tax income  increased 12.2% to $4,947,000 in
1997 as compared to $4,410,000 in 1996 and  $2,751,000 in 1995.  Net income as a
percentage  of sales was  5.9%,  5.4% and 3.8% in  fiscal  1997,  1996 and 1995,
respectively.

At March 30, 1997 there were 38 owned and twelve licensed Benihana  restaurants.
Four licensed  restaurants  opened in Little Rock,  Arkansas;  Reno, Nevada; the
island of Aruba and Bogota, Colombia during fiscal 1997.

The Company's  financial  statements and the discussion and data presented below
reflect  the 1995  Reorganization  pursuant  to which the  Company  acquired  17
restaurants,  four license  agreements  and the U.S.  trademarks  of Benihana of
Tokyo,  Inc.  (BOT) and  pursuant to which the Company  became the  successor of
Benihana  National  Corp.  (BNC)  through  the merger of BNC and a wholly  owned
subsidiary  of the Company.  The  Reorganization  was  accounted for in a manner
similar  to that of a pooling  of  interests.  Under the  pooling  of  interests
method,  assets,  liabilities  and  equity  are  carried  over  based upon their
historical book values and operating results are included for each of the entire
fiscal years presented. Additionally, pro forma effect to per share earnings was
given for all periods prior to the Reorganization to the incremental  amounts of
interest on additional  indebtedness  and dividends on the preferred  stock that
was issued to effect the Reorganization.

The Company's  revenues  consist of sales of food and beverages  sold in each of
the owned  restaurants  and  licensing  fees received  from  licensees.  Cost of
restaurant  food and beverage sold represents the direct cost of the ingredients
for the prepared food and beverages sold.  Restaurant expenses consist of direct
and  indirect  labor,  occupancy  costs,  advertising  and other  costs that are
directly attributed to each restaurant location.

Restaurant  revenues  and  expenses  are  dependent  upon a  number  of  factors
including  the number of  restaurants  in operation  and  restaurant  patronage.
Revenues are also  dependent  on the average  check amount and expenses are also
dependent  upon the  costs of food  and  beverages  sold,  average  wage  rates,
marketing  costs  and  the  costs  of  interest  and  administering   restaurant
operations.

Revenues

The  amounts of  revenues  and the  changes in amount and  percentage  change in
amount of revenues  from the  previous  fiscal  year are shown in the  following
tables (in thousands):
<TABLE>
<CAPTION>

                                                    YEAR ENDED MARCH
                                            ---------------------------------
                                             1997         1996         1995
                                            -------      -------      -------
<S>                                         <C>          <C>          <C>
Net restaurant sales                        $84,415      $81,094      $72,772
Other income                                    789          512          492
                                            -------      -------      -------

Total Revenues                              $85,204      $81,606      $73,264
                                            =======      =======      =======



                                                     YEAR ENDED MARCH
                                            ---------------------------------
                                             1997         1996         1995
                                            -------      -------      -------
<S>                                         <C>          <C>          <C>
Amount of change from the previous year     $ 3,598      $ 8,342      $ 3,498

Percentage change from the previous year        4.4%        11.4%         5.0%

Comparable sales per restaurant             $ 2,263      $ 2,138      $ 1,966

Percentage growth in comparable sales
  per restaurant                                5.8%         8.7%         7.1%

</TABLE>




                                   17

<PAGE>



Year ended March 30, 1997 compared to March 31, 1996 -- Total  restaurant  sales
increased  $3,321,000  over fiscal 1996. The increase in sales was achieved in a
52 week year as compared to the previous year which consisted of 53 weeks, which
additional week in fiscal 1996  represented  $1,667,000 of revenues.  Comparable
unit sales,  excluding the additional week in the previous year,  increased 5.8%
during fiscal 1997. The increase is attributable  to the continued  increases in
patronage  from the  introduction  of sushi at six  restaurants,  from  physical
improvements made to several  restaurant  properties and from favorable consumer
trends  in the  market  in which  the  Company  operates.  Continuing  favorable
consumer trends in dining at the Company's  restaurants  include two wage earner
families,  consumers seeking entertainment while enjoying the dining experience,
and other favorable demographic  influences.  Increases in patronage resulted in
increased  sales of $4,252,000  offset by a decrease in average check size.  The
average check size in 1997 was $22.42  compared to $22.68 in 1996. The reduction
in average  check size is a result of  increased  lunch  traffic.  Other  income
increased as a result of  additional  licensing  fees of $180,000 and  increased
royalties of $97,000.

Year ended March 31, 1996 compared to March 26, 1995 -- Total  restaurant  sales
increased  $8,322,000  over fiscal 1995.  Fiscal 1996  consisted of 53 weeks and
fiscal 1995 consisted of 52 weeks. The additional week represented $1,667,000 of
the increase.  Comparable  unit sales excluding the additional  week,  increased
7.7% during the year from fiscal  1995.  Comparable  unit sales  increased  as a
result of a number of factors:  sushi was introduced at seven restaurants during
the year which  resulted in  $610,000 of  incremental  sales,  restaurants  have
increased  their hours of operation to offer  weekend  lunch as well as offering
Sunday brunch, and a program to improve upon the physical  attractiveness of the
restaurants  was  accelerated  during the year. One additional  restaurant,  the
Benihana  Grill  near  Sacramento,   California,  opened  in  October  1995  and
represents  $450,000 of the increase in sales.  Menu price  increases had little
impact on the increase in revenues as weighted average  increases were less than
1 1/2%.

Costs and Expenses

Costs of restaurant  sales,  which are generally  variable with sales,  directly
increased  with changes in revenues for each of the fiscal years.  The following
table  reflects the proportion  that the various  elements of costs and expenses
bore to sales and the changes in amounts and percentage  changes in amounts from
the previous fiscal year.
<TABLE>
<CAPTION>

                                                       YEAR ENDED MARCH
                                                ------------------------------
                                                1997         1996         1995
                                                ----         ----         ----
<S>                                             <C>          <C>          <C>
COST AS PERCENTAGE OF RESTAURANT SALES:
Cost of restaurant food and beverage sales      25.7%        26.1%        28.5%
Restaurant expenses                             60.7%        60.0%        60.5%
General and administrative expenses              5.0%         5.9%         6.7%

AMOUNT OF CHANGE FROM PREVIOUS
YEARS (IN THOUSANDS):
Cost of restaurant food and beverage sales    $  530       $  384       $1,744
Restaurant expenses                           $2,570       $4,656       $  666
General and administrative expenses           $ (584)      $  (40)      $  674

Percentages increase(decrease):
Cost of restaurant food and beverage sales       2.5%          .2%         9.2%
Restaurant expenses                              5.3%        10.6%         1.5%
General and administrative expenses            (12.2%)        (.1%)       16.2%
</TABLE>

Year ended  March 30,  1997  compared  to March 31, 1996 -- The cost of food and
beverage sales  increased in total amount as a result of increased sales but was
reduced  as a  percentage  of  sales.  Reductions  in costs  from the  long-term
purchasing  contracts  and  pricing  improvements  have been  largely  realized.
Restaurant  expenses  increased in total  amount and as a  percentage  of sales.
Restaurant  labor expense and related  benefit costs  increased  $1,834,000 as a
result of the increased  sales.  Additionally,  occupancy  costs  increased as a
result of higher rent expense from the aforementioned increased sales.

General and  administrative  costs decreased in total amount in the current year
resulting from reduced compensation expense. Additionally,  certain license fees
were collected that had been written off in the prior year which  contributed to
the decrease.  General and administrative expenses decreased when expressed as a
percentage  of sales due to the increase in sales  coupled with the reduction of
general and administrative expenses.


                                  18

<PAGE>



Interest  expense  decreased  by  $322,000  during  the year.  The  decrease  is
attributable  to the  decrease in total  borrowings  outstanding  from the prior
year.  Additionally,  interest  income  increased  by  $186,000  as a result  of
interest earned.

Year ended  March 31,  1996  compared  to March 26, 1995 -- The cost of food and
beverage sales  increased in total amount as a result of increased sales but was
reduced as a percentage of sales as a result of lower overall commodity costs of
seafood and other  factors.  Long-term  contracts  have been  entered  into with
producers to purchase  lobster that  effectively  lock in lower prices for 22 of
the Company's  restaurants where such  arrangements are feasible.  Additionally,
the Company obtained more favorable  pricing from several vendors for other food
products and services at several of the 17 restaurants  that were purchased from
BOT.  Restaurant  operating costs increased in dollar amount and as a percentage
of sales.  Restaurant  labor  expense and related  benefits  costs  increased by
$2,767,000  as a result of the increased  sales,  increased  operating  hours at
several  restaurants  and  service  improvements  that  were made in some of the
primary  markets.  Advertising and promotional  costs increased by $606,000 as a
result of additional  television and print advertising.  Maintenance and repairs
expense  increased  $214,000  resulting from additional  spending to improve the
appearance at several of the restaurants.  Other restaurant  expenses  increased
resulting from increased  operating hours and certain expenses that are variable
to sales.

Certain  significant  infrequently  occurring  expenses  included in general and
administrative  expenses  were  incurred  in the  previous  year  where  no such
expenses were incurred during fiscal 1996. In the fourth quarter of fiscal 1995,
the Company  wrote off  $659,000  of barter  exchange  credits  and  $125,000 of
deferred financing costs.

Interest expense  increased by $86,000 during the year because of the additional
borrowings made to acquire the BOT Restaurant  properties.  Despite the increase
in debt,  interest  expense  has not risen  significantly  due to the  Company's
successful  effort in reducing its interest rate as part of the consolidation of
its bank indebtedness.

Income Taxes

Prior to the year ended March 30, 1997, the Company had  significant  amounts of
net operating loss  carryforward  that resulted in tax assets.  Other tax assets
resulted from income tax credits and certain  temporary  differences.  Valuation
allowances  were  established  to reduce the tax assets  when,  in  management's
judgment  that it was more  likely  than  not  that  such  assets  would  not be
realized.  Reductions in the valuation  allowances were made when realization of
the tax assets became probable as the Company's profitability  improved.  During
1996 all of the federal tax  benefits of the net  operating  loss  carryforwards
were exhausted  resulting in an increased effective tax rate for 1997 and future
years.  Additionally,  the  Company  generated a net federal tax credit for FICA
taxes paid on reported tip income of $426,000 in 1997 and $288,000 in 1996.  The
effective federal tax rate was 27% in fiscal 1997 and 17% in fiscal 1996.

Liquidity and Capital Resources

The Company does not require  significant  amounts of inventory or  receivables.
Therefore,  the Company, as is typical with many restaurant companies,  does not
have to provide financing for such amounts and operates with a minimum amount of
working capital.

The following  table  presents a summary of the  Company's  cash flow for fiscal
1997.

              Net cash provided by operating activities                $6,300
              Net cash used in investing activities                    (2,853)
              Net cash used in financing activities                    (1,126)
                                                                       ------

              Increase in Cash                                         $2,321
                                                                       ======

The Company's  working capital  increased by $3,416,000 for the year ended March
30, 1997 as a result of cash provided by operations.

Capital  expenditures  increased  to  $2,818,000  in  fiscal  1997  compared  to
$2,156,000 in fiscal 1996.  Capital spending has been accelerated to improve the
appearance of the restaurants, to update restaurant equipment and to build sushi
bars in certain restaurants.  The Company has no material commitments for future
capital  improvements  but the  Company  expects  that it will  continue to make
expenditures  to improve the appearance and efficiency of its  restaurants.  The
Company has signed leases for two Benihana Grill locations in Dallas,  Texas and
Sugar Land, Texas which are expected to open in fiscal 1998. A total of $357,000
was expended for these two

                                  19

<PAGE>



restaurants in fiscal 1997 and $1,043,000 is expected to be expended to complete
the restaurants.  The Company presently intends on opening additional  locations
during fiscal 1998 when suitable  restaurant sites become available.  Management
believes that it has  sufficient  cash  resources  from  operating cash flows to
provide for the construction and opening costs.  All capital  improvements  were
funded from operating cash flow.

Interest  under the term loan accrues at either prime plus a margin from .75% to
1.75% or LIBOR  plus a margin  from 2.25% to 3.25%.  The  interest  rate  margin
depends upon the leverage ratio (liabilities  divided by tangible net worth). In
fiscal 1996, the Company  entered into a seven year interest rate swap agreement
involving the exchange of floating rate interest  payment  obligations for fixed
rate interest payment obligations. The original notional amount of this interest
rate swap  agreement  was  $8,900,000  and is reduced by  approximately  $74,000
monthly until May 2002 when the balance under the agreement expires.

Operating  cash flow for the fiscal years ended 1997 and 1996 was $6,300,000 and
$7,395,000,  respectively. The principal use of this cash was to repay long-term
debt and capital lease  obligations and  expenditures for property and equipment
in addition to improving existing restaurant  properties and construction of the
Dallas and Sugar Land restaurants.

Prior to the Reorganization,  operating cash flows or deficits of the individual
restaurant properties acquired from BOT were distributed to or advanced from the
then owner, BOT. Such amounts are reflected in the statements of cash flows as a
"net cash distributed to BOT." These distributions will not recur;  however, the
Company will be making  payments to BOT under the terms of the  preferred  stock
and promissory note issued to BOT as a part of the Reorganization.




                                  20

<PAGE>
<TABLE>


BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

All dollar amounts in thousands, except per share amounts
<CAPTION>

Year ended                                               March 30,      March 31,      March 26,
                                                           1997           1996           1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>            <C>

Revenues

Net restaurant sales                                      $84,415        $81,094        $72,772
Other income                                                  789            512            492
-------------------------------------------------------------------------------------------------------------------

Total revenues                                             85,204         81,606         73,264
-------------------------------------------------------------------------------------------------------------------


Costs and Expenses

Cost of restaurant food and beverage sales                 21,658         21,128         20,744
Restaurant expenses                                        51,246         48,676         44,020
General and administrative expenses                         4,217          4,801          4,841
Interest expense                                              904          1,226          1,140
-------------------------------------------------------------------------------------------------------------------

Total costs and expenses                                   78,025         75,831         70,745
-------------------------------------------------------------------------------------------------------------------


Income from operations before income taxes                  7,179          5,775          2,519
Income tax provision (benefit) (Note 11)                    2,232          1,365           (232)
-------------------------------------------------------------------------------------------------------------------


Net Income                                               $  4,947       $  4,410        $ 2,751
-------------------------------------------------------------------------------------------------------------------


Pro Forma Income Per Common Share (Note 1)
    Primary earnings per common share                    $    .80       $    .71        $   .42
    Fully diluted earnings per common share              $    .78       $    .70        $   .42
-------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements



                                  21

<PAGE>
<TABLE>


BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

   All dollar amounts in thousands, except share information
<CAPTION>
                                                                                March 30,        March 31,
                                                                                  1997             1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>              <C>
Assets
Current assets:
     Cash and cash equivalents                                                  $  7,043         $  4,722
     Receivables (net of allowance for doubtful accounts of $27
          in 1997 and $57 in 1996, respectively) (Note 10)
         Trade                                                                       218              155
         Other                                                                       324               97
-------------------------------------------------------------------------------------------------------------------

     Total receivables                                                               542              252
     Inventories (Notes 4, 10)                                                     3,148            1,833
     Prepaid expenses (Note 5)                                                       837              920
-------------------------------------------------------------------------------------------------------------------

Total current assets                                                              11,570            7,727

Property and equipment, net (Notes 6, 9, 10)                                      25,416           24,915
Deferred income taxes, net (Note 11)                                               1,487            1,577
Other assets (Note 7)                                                              2,089            2,038
-------------------------------------------------------------------------------------------------------------------


                                                                                 $40,562          $36,257
-------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable and accrued expenses (Note 8)                              $ 7,018          $ 6,539
     Current maturities of long-term debt and
         obligations under capital leases (Notes 9, 10)                            1,436            1,488
-------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                          8,454            8,027

Long-term debt (Note 10)                                                           5,271            6,104
Due to Affiliates, long-term (Note 10)                                               312              439
Obligations under capital leases (Note 9)                                          3,771            4,361

Stockholders' Equity (Notes 10, 12):
     Preferred stock - $1.00 par value; authorized - 5,000,000
       shares, issued and outstanding - 2,000 shares                                   2                2
     Common stock - $.10 par value; convertible into Class A
       Common, authorized - 12,000,000 shares, issued and
       outstanding - 3,557,366 and 3,516,066 shares, respectively                    356              352
     Class A Common stock - $.10 par value; authorized -
       20,000,000 shares, issued and outstanding -
       2,516,300 and 2,316,300 shares, respectively                                  252              232
     Additional paid-in capital                                                   14,978           14,285
     Retained earnings                                                             7,282            2,455
     Treasury stock - 9,177 shares at cost                                          (116)
-------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                        22,754           17,326
-------------------------------------------------------------------------------------------------------------------


                                                                                 $40,562          $36,257
-------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements



                                    22

<PAGE>


<TABLE>
BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

     All dollar amounts in thousands, except share information
<CAPTION>

                                                                                                     Retained
                                                                        Class A      Additional      Earnings
                                                Preferred   Common      Common         Paid-in     (Accumulated    Treasury
                                                  Stock      Stock      Stock          Capital       Deficit)       Stock
---------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>         <C>          <C>           <C>             <C>

Balance, March 27, 1994                         $     2     $   349     $  232       $17,700       $(3,484)       $   -
  Cash paid and liabilities incurred for the
    acquisition of the BOT Restaurants
    (Note 2)                                                                          (4,363)
  Funds distributed to BOT                                                                            (982)
  Net income                                                                                         2,751
---------------------------------------------------------------------------------------------------------------------------


Balance, March 26, 1995                               2          349       232        13,337        (1,715)          -
  Issuance of 22,700 shares of stock under
    exercise of options                                           3                       73
  Issuance of 450 shares of common stock
    for incentive compensation                                                             5
  Tax benefit resulting from difference
    between book and tax bases of assets
    acquired from BOT                                                                    870
  Preferred stock dividend                                                                            (105)
  Funds distributed to BOT                                                                            (135)
  Net income                                                                                         4,410
---------------------------------------------------------------------------------------------------------------------------


Balance, March 31, 1996                               2          352       232        14,285         2,455           -
  Issuance of 41,000  shares of stock under
    exercise of options                                            4                     178
  Purchase of 9,177 shares of common stock                                                                         (116)
  Preferred stock dividend                                                                            (120)
  Issuance of 300 shares of common stock
    for incentive compensation                                                             3
  Issuance of 200,000 shares under
    exercise of warrants                                                     2           512
  Net income                                                                                         4,947
--------------------------------------------------------------------------------------------------------------------------


Balance, March 30, 1997                         $     2     $    356    $  252       $14,978       $ 7,282        $ 116)
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements



                                  23

<PAGE>


<TABLE>
BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

     All dollar amounts in thousands
<CAPTION>
                                                                       March 30,      March 31,      March 26,
                                                                         1997           1996           1995
-------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>            <C>

Operating Activities:
     Net income                                                         $4,947         $4,410         $2,751
     Adjustments to reconcile net income to net
       cash provided by operating activities:
         Depreciation and amortization                                   2,427          2,416          2,136
         Issuance of common stock for incentive compensation                 3              5
     Deferred taxes                                                         90            676           (417)
     Change in operating assets and liabilities that provided
       (used) cash:
         Accounts receivable                                              (290)           149             29
         Inventories                                                    (1,315)          (274)           (91)
         Prepaid expenses                                                   83            377             (7)
         Other assets                                                     (124)            48            854
         Accounts payable and accrued expenses                             479           (412)           585
-------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                                6,300          7,395          5,840
-------------------------------------------------------------------------------------------------------------------


Investing Activities:
     Expenditures for property and equipment                             2,818)        (2,156)        (1,264)
     Acquisition of BOT Restaurants                                                                     (713)
     Increase in cash surrender value of life insurance policy             (35)           (30)           (29)
-------------------------------------------------------------------------------------------------------------------

Net cash (used in) investing activities                                 (2,853)        (2,186)        (2,006)
-------------------------------------------------------------------------------------------------------------------


Financing Activities:
     Dividends paid on preferred stock                                    (120)          (105)
     Proceeds from issuance of long-term debt                                             319
     Repayment of long-term debt and obligations under
        capital leases                                                  (1,604)        (2,496)        (2,454)
     Net cash distributed to BOT                                                         (135)          (982)
     Proceeds from issuance of common stock                                714             76
     Purchase of treasury stock                                           (116)
-------------------------------------------------------------------------------------------------------------------

Net cash (used in) financing activities                                 (1,126)        (2,341)        (3,436)
-------------------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                2,321          2,868            398
Cash and cash equivalents, beginning of year                             4,722          1,854          1,456
-------------------------------------------------------------------------------------------------------------------


Cash and cash equivalents, end of year                                  $7,043         $4,722         $1,854
-------------------------------------------------------------------------------------------------------------------

Supplemental Cash Flow Information Cash paid during the year for:
   Interest                                                            $   733         $  809         $  617
   Income taxes                                                        $ 2,061         $  353         $  214

Noncash Items:
   Long-term  liabilities  of $3,650,000  were  incurred in connection  with the
   agreement to acquire the BOT Restaurants in 1995. See Note 2.

   Capital lease  obligations  of $315,000  were  incurred  during 1995 when the
   Company entered into lease agreements for new equipment.

See notes to consolidated financial statements
</TABLE>

                                   24

<PAGE>



BENIHANA INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED MARCH 30, 1997, MARCH 31, 1996 AND MARCH 26, 1995

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Business - Benihana Inc. and Subsidiaries ("The Company") is a Delaware
         corporation  that  owns  and  operates  38  Japanese   teppanyaki-style
         restaurants and licenses  twelve others.  The Company has the rights to
         open,  license and develop  Benihana  restaurants in the United States,
         Central and South America and the Caribbean islands.

         Use  of  Estimates  -  The  preparation  of  financial   statements  in
         conformity with generally accepted accounting  principles requires that
         management  make  estimates  and  assumptions  that affect the reported
         amounts  of  assets  and  liabilities  at the  date  of  the  financial
         statements and the reported  amounts of revenue and expenses during the
         reporting period. Actual results could differ from those estimates.

         Fiscal Year - The Company's  fiscal year is a 52/53 week year ending on
         the  Sunday  closest  to March 31 of each  year.  During the year ended
         March 31, 1996, the Company's fiscal year consisted of 53 weeks.

         Principles of  Consolidation - The  consolidated  financial  statements
         include the accounts of Benihana Inc., and all of its subsidiaries.  In
         consolidation,  significant  intercompany accounts and transactions are
         eliminated.

         Inventories  -  Inventories,  which consist  principally  of restaurant
         operating  supplies  and food and  beverage  are priced at the lower of
         cost (first-in, first-out method) or market.

         Pre-opening Costs - Costs of employee  salaries,  relocation  expenses,
         training  of  chefs,  and  miscellaneous  supplies  prior to  opening a
         restaurant are included as  pre-opening  costs and are amortized over a
         twelve-month period commencing with the opening.

         Property  and  Equipment - The  Company's  investment  in property  and
         equipment  is  stated  at  cost  and  includes   expenditures  for  new
         facilities,  additions to existing  facilities,  and  interior  design,
         capitalized  interest and  construction  costs which relate to property
         and  equipment.  Depreciation  and  amortization  are  computed  by the
         straight-line  method over the  estimated  useful life  (buildings - 30
         years,  restaurant furniture,  fixtures and equipment - 8 years, office
         equipment  - 8 years,  and  leaseholds  - lesser  of the  lease  terms,
         including  renewal options,  or useful life).  During 1996, the Company
         reduced the lives of personal computers and related equipment from 8 to
         3 years. The effect of the change in lives on depreciation  expense was
         immaterial.

         Pro Forma Net Income  Per  Common  Share - The pro forma net income per
         common  share was  computed  by using the  weighted  average  number of
         shares and dilutive common stock equivalents (6,069,000 shares in 1997,
         6,003,000  shares in 1996 and 5,867,000 shares in 1995) of Common Stock
         and Class A Common  Stock.  The  amounts  of  preferred  dividends  and
         interest  expense  that  would  have been  incurred  as a result of the
         acquisition of the BOT  Restaurants  (see Note 2) have been factored in
         the  calculation  of pro  forma  earnings  per  common  share  from the
         beginning of each of the fiscal  years ended March 31, 1996,  and March
         26, 1995.

         Cash and Cash  Equivalents  - The Company  considers  all highly liquid
         investment  instruments  purchased  with a maturity of three  months or
         less to be cash equivalents.


                                   25

<PAGE>



         Accounting  for Long-Lived  Assets - Statement of Financial  Accounting
         Standards (SFAS) No. 121,  "Accounting for the Impairment of Long-Lived
         Assets and for  Long-Lived  Assets to be Disposed of" required that the
         Company  evaluate  its  net  investment  in  restaurant  properties  in
         relation to the  estimated  future cash flows  expected to be generated
         from revenue  productive  assets to determine if an impairment of value
         exists.  The Company has  determined  that no write down was  necessary
         during fiscal 1997 and 1996 based upon such evaluation.

         Stock-Based  Compensation - In October 1995,  FASB issued SFAS No. 123,
         "Accounting for Stock-Based  Compensation",  effective for transactions
         entered  into in fiscal years  beginning  after  December 15, 1995.  As
         permitted  by SFAS No.  123,  the  Company  will  continue to apply its
         current accounting policy under Accounting Principles Board Opinion No.
         25,  "Accounting  for Stock Issued to Employees",  and include  certain
         required disclosures in its financial statements (Note 12).

2.       ACQUISITION

         Effective  May 15, 1995,  the Company  became the successor to Benihana
         National  Corp.  (BNC) through the merger  (Merger) of BNC and a wholly
         owned subsidiary of the Company.  Simultaneously  with the Merger,  the
         Company  acquired from  Benihana of Tokyo,  Inc.  (BOT),  a corporation
         privately  owned by Rocky H. Aoki, the Company's  Chairman of the Board
         and founder of the Benihana  restaurant  chain,  all of BOT's  Benihana
         restaurants  (the BOT  Restaurants) in the  continental  United States,
         consisting of 17 company-owned and four licensed locations.

         The  acquisition  of the BOT  Restaurants  has been  accounted for in a
         manner  similar to a pooling of interests  since it was acquired from a
         company under common  control.  Under the pooling of interests  method,
         assets,  liabilities  and  equity  are  carried  over  based upon their
         historical  book values and operating  results are included for each of
         the entire fiscal years  presented.  Additionally,  pro forma effect to
         per  share   earnings   was  given  for  all   periods   prior  to  the
         Reorganization  for the  incremental  amounts of interest on additional
         indebtedness  and dividends on the  preferred  stock that was issued to
         effect the  Reorganization.  The Company  paid  $3,000,000  in cash and
         issued 76,905  shares of Common Stock,  2,000 shares of $1.00 par value
         Class A Convertible  Preferred  Stock,  and a 7 1/2% promissory note in
         the amount of $650,000.

3.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         In  accordance  with SFAS No.  107,  "Disclosures  about  Fair Value of
         Financial  Instruments,"  the Company has  estimated  the fair value of
         financial instruments.  The estimated fair value has been determined by
         the  Company  using  available   market   information  and  appropriate
         valuation methodologies.  However, considerable judgment is required in
         interpreting data to develop such estimates. Accordingly, the estimates
         presented herein are not necessarily indicative of the amounts that the
         Company  could  realize  in a  current  market  exchange.  The  use  of
         different market  assumptions could have a material effect on estimated
         fair  value.  The  carrying  value  and  estimated  fair  value  of the
         financial  instruments  held by the Company as of March 30, 1997 are as
         follows (in thousands):


                                   26

<PAGE>
<TABLE>
<CAPTION>


                                                                  1997                          1996
                                                          -----------------------------------------------------
                                                          Carrying     Estimated        Carrying     Estimated
                                                            Value      Fair Value         Value      Fair Value
                                                          --------     ----------       --------     ----------
<S>                                                       <C>          <C>              <C>          <C>
         Financial assets
              Cash and cash equivalents                   $ 7,043      $ 7,043          $ 4,722      $ 4,722
              Receivables                                 $   861      $   833          $   595      $   568
              Cash surrender value of officer's
                  life insurance                          $   305      $   305          $   270      $   270

         Financial liabilities
              Bank and other indebtedness                 $ 6,543      $ 6,791          $ 7,495      $ 7,771

</TABLE>
         The following  methods and  assumptions  were used to estimate the fair
         value  of  the  Company's  financial   instruments  for  which  it  was
         practicable to estimate that value:

         Cash and cash equivalents
              The  carrying  value   approximates  fair  value  because  of  the
              short-term nature of the instruments.

         Receivables
              The  carrying  value   approximates  the  fair  value  of  current
              receivables because of the short-term nature of these instruments.
              The fair value of long-term  receivables  was  estimated  based on
              discounted cash flows expected to be received using interest rates
              at which similar loans are made to borrowers  with similar  credit
              ratings.

         Long-term debt
              The fair value of outstanding  borrowings under its long-term debt
              agreement  approximates the carrying value since the interest rate
              floats  subject to market  conditions.  The value of the  interest
              rate swap  agreement  included  in the fair  value of the debt was
              obtained from dealer quotes which  represent the estimated  amount
              the Company would receive or pay to terminate the agreement taking
              into consideration current market interest rates.

<TABLE>
4.   INVENTORIES
<CAPTION>
         Inventories consist of (in thousands):
                                                                     March 30,          March 31,
                                                                       1997               1996
                                                                     ---------          ---------
<S>                                                                  <C>                <C>
         Food and beverage                                           $  1,243           $    565
         Supplies                                                       1,905              1,268
                                                                     --------           --------

                                                                     $  3,148           $  1,833
                                                                     ========           ========

5.   PREPAID EXPENSES
<CAPTION>
         Prepaid expenses consist of (in thousands):
                                                                     March 30,          March 31,
                                                                       1997               1996
                                                                     ---------          ---------
<S>                                                                  <C>                <C>
         Prepaid insurance                                           $    547           $    589
         Prepaid advertising                                               14                 35
         Other                                                            276                296
                                                                     --------           --------

                                                                     $    837           $    920
                                                                     ========           ========


                                   27

<PAGE>



6.   PROPERTY AND EQUIPMENT
<CAPTION>
         Property and equipment consist of (in thousands):
                                                                     March 30,          March 31,
                                                                       1997               1996
                                                                     ---------          ---------
<S>                                                                  <C>                <C>
         Land                                                         $ 4,824            $ 4,824
         Buildings                                                      9,566              9,374
         Leasehold improvements                                        22,998             21,254
         Restaurant furniture, fixtures, and equipment                 14,075             13,209
         Restaurant facilities and equipment under
            capital leases                                              7,655              8,198
                                                                      -------            -------
                                                                       59,118             56,859
         Less accumulated  depreciation and amortization
          (Including accumulated amortization of
          restaurant  facilities  and equipment
          under capital leases of $5,599 and $5,493 in
          1997 and 1996, respectively)                                 34,059             31,944
                                                                      -------            -------
                                                                       25,059             24,915
         Restaurants under construction                                   357
                                                                      -------            -------

                                                                      $25,416            $24,915
                                                                      =======            =======

7.   OTHER ASSETS
<CAPTION>
         Other assets consist of (in thousands):

                                                                     March 30,          March 31,
                                                                       1997               1996
                                                                     ---------          ---------
<S>                                                                  <C>                <C>
         Lease acquisition costs                                      $   490            $   551
         Cash surrender value of officer's life insurance                 305                270
         Premium on liquor licenses                                       651                651
         Long-term note receivable                                        196                232
         Security deposits                                                162                175
         Other                                                            285                159
                                                                      -------            -------

                                                                      $ 2,089            $ 2,038
                                                                      =======            =======
</TABLE>
         Included  in other  assets  are lease  acquisition  costs  incurred  in
         connection  with the purchase of one  restaurant.  Such costs are being
         amortized over the life of the lease.  Amortization expense was $61,000
         each year for 1997, 1996 and 1995.

         Liquor licenses are stated at cost which,  in the aggregate,  is not in
         excess of market.  Certain of the liquor  licenses have unlimited lives
         provided that they are renewed annually (as is management's  intention)
         and, accordingly, the cost of those liquor licenses is not amortized.



                                   28

<PAGE>


<TABLE>
8.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts payable and accrued expenses consist of (in thousands):
<CAPTION>
                                                                     March 30,     March 31,
                                                                       1997          1996
                                                                     ---------     ---------
<S>                                                                  <C>           <C>
         Accounts payable                                            $ 2,351       $ 2,100
         Accrued salaries                                                687           363
         Accrued property taxes                                          293           446
         Accrued incentive compensation                                  866           736
         Taxes, other than income taxes                                  973           804
         Other accrued operating expenses                              1,848         2,090
                                                                     -------       -------

                                                                     $ 7,018       $ 6,539
                                                                     =======       =======
</TABLE>
9.   LEASE OBLIGATIONS

         The Company  conducts its business  primarily using leased  facilities.
         The  typical  restaurant  lease is for a term of between 15 to 25 years
         with renewal options ranging from 5 to 25 years.  The leases  generally
         provide for the payment of property taxes, utilities, and various other
         use and occupancy  costs.  Rentals under certain  leases are based on a
         percentage  of sales in  excess  of a certain  minimum  level.  Certain
         leases  provide for increases  based upon the changes in consumer price
         index.   The  Company  is  also  obligated  under  various  leases  for
         restaurant  equipment  and for  office  space  and  equipment.  Minimum
         payments under lease  commitments are summarized  below for capital and
         operating  leases.  The imputed interest rates used in the calculations
         for  capital  leases vary from 9.75% to 12% and are  equivalent  to the
         rates which would have been  incurred to borrow,  over a similar  term,
         the amounts necessary to purchase the leased assets.

         The amounts of operating and capital lease  obligations  are as follows
         (in thousands):

<TABLE>
<CAPTION>
                                                                    Operating        Capital
                                                                      Leases         Leases
                                                                    ---------       --------
<S>                                                                 <C>             <C>
         Fiscal year ending

         1998                                                        $ 2,044        $    916
         1999                                                          1,859             893
         2000                                                          1,795             893
         2001                                                          1,524             893
         2002                                                          1,161             893
         Thereafter                                                    7,230           1,558
                                                                     -------         -------

         Total minimum lease payments                                $15,612           6,046
                                                                     =======
         Less amount representing interest                                             1,799
                                                                                     -------
         Total obligations under capital leases                                        4,247
         Less current maturities                                                         476
                                                                                     -------
         Long-term obligations under capitalized
           leases at March 30, 1997                                                  $ 3,771
                                                                                     =======
</TABLE>






                                   29

<PAGE>


<TABLE>
         Rental expense consists of (in thousands):
<CAPTION>
                                                     March 30,         March 31,        March 26,
                                                       1997              1996             1995
                                                     ---------         ---------        ---------
<S>                                                  <C>               <C>
         Minimum rental commitments                  $  3,310          $  3,162         $  2,994
         Rental based on percentage of sales            1,036               884              699
                                                     --------          --------         --------

                                                     $  4,346          $  4,046         $  3,693
                                                     ========          ========         ========

10.  LONG-TERM DEBT
<CAPTION>
        Long-term debt consists of (in thousands):
                                                                       March 30,        March 31,
                                                                         1997             1996
                                                                       ---------        ---------
<S>                                                                    <C>              <C>
        Notes payable - bank:
              Term loan                                                $  6,104         $  6,937

              7 1/2% Promissory Note due to BOT, payable
              in 60 monthly installments of $13 (See Note 2)                439              558
                                                                       --------         --------
                                                                          6,543            7,495

         Less current portion                                               960              952
                                                                       --------         --------

                                                                       $  5,583         $  6,543
                                                                       ========         ========
</TABLE>
         In  connection  with the  acquisition  described in Note 2, the Company
         consolidated  its  outstanding  bank  indebtedness  and  an  additional
         $3,300,000  of  borrowings   into  one  term  loan   arrangement   (the
         Consolidated  Loan) on May 15, 1995. The terms of the Consolidated Loan
         call for 83 equal monthly principal payments of $69,427 commencing June
         1995 and a final payment of $1,868,775 in May 2002.  Interest under the
         term loan  accrues at either  prime plus a margin from .75% to 1.75% or
         at LIBOR plus a margin from 2.25% to 3.25%.  The  interest  rate margin
         depends upon the leverage  ratio  (liabilities  divided by tangible net
         worth).  During the year ended March 30, 1997,  interest was accrued at
         LIBOR plus 2.50% (7.94% at March 30, 1997). In fiscal 1996, the Company
         entered into a seven year  interest rate swap  agreement  involving the
         exchange of floating rate interest  payment  obligations for fixed rate
         payment  obligations.  The swap  agreement  was entered into to protect
         against  significant  increases in interest  rates on the variable rate
         bank  indebtedness.  Periodic  cash  payments  either  received or paid
         pursuant to the swap are accrued on a settlement basis as an adjustment
         to interest expense.  The original notional amount of the agreement was
         $8,900,000  and is reduced by $74,000  monthly  until May 2002 when the
         balance of the agreement expires.

         The Consolidated  Loan is collateralized by a mortgage on the Company's
         real  property  and a  security  interest  in  the  Company's  personal
         property.   The   Consolidated   Loan   agreement   limits   additional
         indebtedness, capital expenditures and the payment of dividends and has
         requirements  to  maintain  a minimum  amount of  tangible  net  worth,
         specific  ratio of  liabilities  to tangible net worth and debt service
         coverage, among other restrictive covenants.

11.  INCOME TAXES

         Deferred  tax assets and  liabilities  reflect the impact of  temporary
         differences  between  amounts of assets and  liabilities  for financial
         reporting  purposes  and the bases of such  assets and  liabilities  as
         measured  by income tax law. A valuation  allowance  is  recognized  to
         reduce deferred tax assets to the amounts that are more likely than not
         to be realized.


                                    30

<PAGE>
<TABLE>


         The net deferred tax asset balance consists of (in thousands):
<CAPTION>
                                                    March 30, 1997                           March 31, 1996
                                          Assets     Liabilities      Total      Assets       Liabilities       Total
         -------------------------------------------------------------------------------------------------------------
<S>                                       <C>        <C>              <C>        <C>          <C>               <C>
         Excess book amortization for
             for pre-opening costs and
             capital leases               $  899        $  -          $  899     $   935       $   -            $  935
         Tax loss carryforwards                                                       99                            99
         Accelerated depreciation for
              tax purposes                                 708          (708)                      915            (915)
         Income tax credits                  963                         963       1,324                         1,324
         Other                               333                         333         134                           134
                                          ----------------------------------------------------------------------------

         Total asset (liability)          $2,195        $  708        $1,487     $ 2,492      $    915          $1,577
                                          ============================================================================

         The income tax provision (benefit) consists of (in thousands):
<CAPTION>
                                                                     March 30,         March 31,        March 26,
                                                                       1997              1996             1995
         --------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
         Current:
             Federal (net of utilization of net operating loss
             of $5,488 and $1,800 in fiscal 1996 and
             1995, respectively)                                      $1,637            $   320          $    10
             State (net of utilization of net operating loss
             of $480 in 1995)                                            505                369              175

         Deferred:
             Federal and State                                            90                676             (417)
                                                                  -----------------------------------------------

         Income tax provision (benefit)                               $2,232             $1,365          $  (232)
                                                                  ===============================================

         The income tax provision (benefit) differed from the amount computed at
         the statutory rate as follows (in thousands):
<CAPTION>
                                                                     March 30,         March 31,        March 26,
                                                                       1997              1996             1995
         --------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
         Federal income tax provision at statutory rate of 34%        $2,441            $1,963           $   856
         Change in valuation allowance                                                    (592)             (510)
         State income taxes, net of federal benefit                      333               244               117
         Subchapter S exemption                                                            (62)             (463)
         Tax credits, net                                               (426)             (288)             (282)
         Other                                                          (116)              100                50
                                                                      ------------------------------------------

         Income tax provision (benefit)                               $2,232            $1,365           $  (232)
                                                                      ===========================================
</TABLE>
         BOT had elected to be treated as a  Subchapter  S  Corporation  whereby
         earnings,  except in certain  state  jurisdictions,  are taxable to the
         stockholder.  No pro forma  effect for  federal  income  taxes has been
         recorded  related to the earnings of the BOT  Restaurants  prior to its
         acquisition  in fiscal 1995 since there were  sufficient  deferred  tax
         assets available to offset such taxes.

12.  STOCKHOLDERS' EQUITY

         Preferred Stock - The preferred  stock has a liquidation  preference of
         $1,000 per share,  carries a cumulative dividend of 6% and entitles the
         holder a right to convert into 300,000 shares of the Company's  Class A
         Common Stock.  The Company has the option to redeem the Preferred Stock
         commencing January 1997 at $1,000 per share.

                                   31

<PAGE>



         Common Stock - The  Company's  Common Stock is  convertible  to Class A
         Common  Stock on a  one-for-one  basis.  The  Class A  Common  Stock is
         identical to the Common Stock except that it gives the holder one-tenth
         (1/10) vote per share,  voting together with the Company's Common Stock
         as a single class on all matters except the election of directors.  For
         election of directors,  the Class A Common Stockholders vote as a class
         to elect 25% of the members of the Board of Directors.

         Stock  Options - The  Company has various  stock  option  plans (a 1994
         Employee  Stock  Option  Plan,  a 1996 Class A Stock  Option Plan and a
         Directors  Stock  Option  Plan) under which a maximum of  approximately
         850,000  shares of the  Company's  Common Stock may be issued.  Options
         granted  under the plans may not have terms  exceeding  ten years,  and
         require an exercise price at market value on the date of the grant,  or
         at 110% of market value in the case of optionees (for  incentive  stock
         options)  that own more than 10% of the combined  voting  rights of the
         Company's  Common and Class A Common Stock.  Under the director's plan,
         options to purchase 2,500 shares are  automatically  granted to each of
         the  Company's  non-employee  directors  on the  date of the  Company's
         annual meeting.

         Additionally,  the Company had a 1985 Stock Option Plan that expired on
         October  9, 1995.  Certain  options  granted  under such plan are still
         exercisable on varying dates through 2005.

         In connection  with a previous  issuance of long-term debt to a bank in
         1990, the Company issued a warrant to purchase  200,000 shares of Class
         A Common Stock at a price of $2.66. This warrant was purchased from the
         bank by one of the members of the Company's  Board of Directors  during
         fiscal 1996 and was exercised during fiscal 1997.

         SFAS No. 123 requires  entities that account for awards for stock-based
         compensation  to employees in accordance with APB No. 25 to present pro
         forma   disclosure   of  net  income  and  earnings  per  share  as  if
         compensation cost was measured at the date of grant based on fair value
         of the award.  The fair value for these  options was  estimated  at the
         date of grant  using a Black-  Scholes  option  pricing  model with the
         following  weighted-average  assumptions:  a risk-free interest rate of
         6.8%;  no  dividend   yield;   a  volatility   factor  of  45%;  and  a
         weighted-average expected life of the options of 8 years.

         The  Black-Scholes  option  valuation  model was  developed  for use in
         estimating  the fair  value of traded  options  which  have no  vesting
         restrictions and are fully transferable.  In addition, option valuation
         models require the input of highly subjective assumptions including the
         expected stock price  volatility.  Because the Company's  stock options
         have  characteristics  significantly  different  from  those of  traded
         options,  and because changes in the subjective  input  assumptions can
         materially affect the fair value estimate, in management's opinion, the
         existing models do not necessarily provide a reliable single measure of
         the fair value of its stock options.

         For purpose of pro forma  disclosures,  the estimated fair value of the
         options is amortized to expense over the options'  vesting period.  The
         Company's  net income and net income per share would have been  reduced
         to the  following  pro forma  amounts (in  thousands,  except per share
         amounts):
<TABLE>
<CAPTION>
                                                      March 30,        March 31,
                                                        1997             1996
                                                      ---------        ---------
<S>                                                   <C>              <C>
         Net income:
             As reported                               $4,947           $4,410
             Pro forma                                 $4,870           $4,386

         Primary earnings per share:
             As reported                                 $.80             $.71
             Pro forma                                   $.78             $.71

</TABLE>
                                    32

<PAGE>



         The above pro forma  amounts  reflect only the effect of stock  options
         granted subsequent to April 1, 1995. Accordingly, the pro forma amounts
         may not be  representative of the future effects on reported net income
         and  earnings  per share that will result  from the future  granting of
         stock options,  since the pro forma  compensation  expense is allocated
         over the periods in which  options  become  exercisable  and net option
         awards are granted each year.

         The following table  summarizes  information  about  fixed-price  stock
         options outstanding at March 30, 1997:
<TABLE>
<CAPTION>
                                       Options Outstanding                             Options Exercisable
                               -----------------------------------------              ---------------------
                                            Weighted-
                                             Average          Weighted                             Weighted
          Ranges of                         Remaining         Average                               Average
          exercise                         Contratual        Exercise                              Exercise
           Prices               Number        Life             Price                 Number         Price
         ---------------------------------------------------------------------------------------------------
<S>      <C>                    <C>        <C>               <C>                     <C>           <C>       
         $ 1 3/8 -  3 1/4       42,400         7              $ 2.52                 42,400         $ 2.52
           6 3/4 -  8 3/8       36,500         8                7.46                 36,500           7.46
           8 3/8 - 10 1/8      123,507         9                9.41                 41,169           9.41
          10 1/2 - 11 1/2       20,000         9               10.88                 20,000          10.88
         ----------------      -------                                              -------
         $ 1 3/8 -$11 1/2      222,407                                              140,069

         Transactions  under the above plans for the three years ended March 30,
         1997 are as follows:
<CAPTION>
                                                              March 30,         March 31,        March 26,
                                                                1997              1996             1995
         -------------------------------------------------------------------------------------------------
<S>                                                           <C>               <C>              <C>  
         Balance, beginning of year                            129,900           121,100            72,450
         Granted                                               133,507            31,500            61,000
         Canceled                                                                                  (10,000)
         Expired                                                                                    (2,350)
         Exercised                                             (41,000)          (22,700)
                                                               -------------------------------------------

         Balance, end of year                                  222,407           129,900           121,100
                                                               ===========================================

         Weighted average fair value of options
             granted during year                               $  9.57           $  8.69           $ 4.07

</TABLE>
         On March 30, 1997, options for 140,069 of the shares are exercisable at
         prices ranging from $1 3/8 to $11 1/2.

         There were  approximately  913,900  shares of common stock  reserved at
         March 30, 1997,  for issuance  upon exercise of stock options under all
         stock option plans.

         Stock Rights - During  fiscal 1997,  the Company  adopted a Shareholder
         Rights Plan and declared a distribution of one Preferred Share Purchase
         Right (Right) for each outstanding  share of the Company's Common Stock
         and Class A Common  Stock as of  February  26,  1997 and for each share
         issued  by  the  Company  thereafter.  The  Rights  operate  to  create
         substantial  dilution  to a  potential  acquiror  who  seeks to make an
         acquisition  the  terms  of which  the  Company's  Board  of  Directors
         believes is inadequate or structured in a coercive manner.

         Prior  to  becoming  exercisable,  the  Rights  are  evidenced  by  the
         certificates representing the Common Stock and Class A Common Stock and
         may not be  separately  traded.  The Rights become  exercisable  on the
         tenth day (or such later date as the Board of Directors may  determine)
         after public  announcement that a person or a group (subject to certain
         exceptions) has acquired 20% or more of the outstanding Common Stock or
         an  announcement  of a tender  offer  that would  result in  beneficial
         ownership by a person or a group of 20% or more of the Common Stock.



                                   33

<PAGE>



13.  INCENTIVE AND DEFERRED COMPENSATION PLANS

         In fiscal 1996, the Company adopted the Benihana Incentive Compensation
         Plan (Plan)  whereby  bonus  awards are made if the  Company  attains a
         certain  targeted  return  on  equity.  The  purpose  of the Plan is to
         encourage  and enable  officers and  employees  and align  interests of
         Benihana  employees  with those of its  shareholders.  One-third of the
         amounts  awarded is immediately  made available to the employee and the
         remaining  two-thirds  is  available  ratably over the  succeeding  two
         years.  Amounts allocated under the plan may be taken in cash, deferred
         in a non-qualified  deferred  compensation  plan or be used to purchase
         the Company's Common Stock at 85% of its market value. The target rate,
         which for 1997 was 20% and for 1996 was 15%, is approved annually based
         upon a  review  of the  return  of  other  publicly  traded  restaurant
         businesses by the Compensation Committee of the Board of Directors. The
         amount of the  awards is  capped at 50% of the  eligible  salary of the
         employee (salary less 40% of the FICA salary base). Under the Plan, the
         Company  accrued  $450,000  and  $503,000  for  fiscal  1997 and  1996,
         respectively.

         In fiscal 1996, the Company adopted the Benihana  Executive  Retirement
         Plan  whereby  certain key  executives  may elect to defer up to 20% of
         their  salary  and  100% of their  bonus  until  retirement  or age 55,
         whichever is later, or due to disability or death. Employees may select
         from various  investment  options for their available account balances.
         Investment earnings are credited to their accounts.

14.  QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
         Quarter ended (in thousands except for per share amounts)
<CAPTION>

                                                                    March 30, 1997
         -------------------------------------------------------------------------------------------------
                                               4th              3rd               2nd              1st
<S>                                            <C>              <C>               <C>              <C>
         REVENUES                              $20,597          $19,826           $19,176          $25,605
         GROSS PROFIT                           15,369           14,748            14,343           19,086
         NET INCOME                              1,401            1,402               841            1,303
         PRO FORMA NET INCOME
           PER COMMON SHARE:
             PRIMARY                           $   .23          $   .22           $   .13          $   .21
             FULLY DILUTED                     $   .22          $   .22           $   .13          $   .21

         Quarter ended (in thousands except for per share amounts)
<CAPTION>
                                                                    March 31, 1996
         -------------------------------------------------------------------------------------------------
                                               4th              3rd               2nd              1st
<S>                                            <C>              <C>               <C>              <C>
         REVENUES                              $ 21,267         $ 18,969          $ 17,699         $ 23,671
         GROSS PROFIT                            16,035           14,180            13,038           17,225
         NET INCOME                               1,301            1,309               689            1,111
         PRO FORMA NET INCOME
           PER COMMON SHARE:
             PRIMARY                           $    .21         $    .21          $    .11         $    .18
             FULLY DILUTED                     $    .21         $    .21          $    .11         $    .18

</TABLE>




                                   34

<PAGE>









                      INDEPENDENT AUDITORS' REPORT






To the Board of Directors and Stockholders of Benihana Inc:

We have audited the  accompanying  consolidated  balance sheets of Benihana Inc.
and subsidiaries  (the Company) as of March 30, 1997 and March 31, 1996, and the
related  consolidated  statements of operations,  stockholders'  equity and cash
flows for each of the three  years in the period  ended  March 30,  1997.  These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial position of Benihana Inc. and subsidiaries as
of March 30, 1997 and March 31, 1996,  and the results of their  operations  and
their cash flows for each of the three years in the period  ended March 30, 1997
in conformity with generally accepted accounting principles.









Miami, Florida
May 9, 1997




                                  35

<PAGE>


COMMON STOCK INFORMATION

The Company's  Common Stock and Class A Stock are traded in the Nasdaq  National
Market  System.  There were 326 holders of record of the Company's  Common Stock
and 474 holders of record of the Class A Common Stock at March 30, 1997.

The table  below sets forth  high and low bid  prices for the  Company's  Common
Stock and Class A Common Stock, which do not include commissions and mark-ups or
mark-downs  for the  periods  indicated.  Such bid prices  reflect  inter-dealer
prices  without  retail   mark-ups,   mark-downs  or  commissions  and  may  not
necessarily represent actual transactions.
<TABLE>
<CAPTION>

                                                            Fiscal Year Ended
                                                            -----------------
                                                March 30, 1997                 March 31, 1996
                                            ----------------------         ----------------------
                  COMMON STOCK              High            Low            High            Low
                  <S>                       <C>             <C>            <C>             <C>
                  1st Quarter               16 1/4          10 1/4          8 3/4           7
                  2nd Quarter               14 1/8          10             10 3/8           8 3/8
                  3rd Quarter               14              10 7/8         10 3/4           9 7/8
                  4th Quarter               12               7             11 3/4          10 3/8


<CAPTION>

                                                            Fiscal Year Ended
                                                            -----------------
                                               March 30, 1997                 March 31, 1996
                                            ----------------------         ----------------------
                  CLASS A
                  COMMON STOCK              High            Low            High           Low
                  <S>                       <C>             <C>            <C>            <C>
                  1st Quarter               10               8 3/8         5 1/2           4
                  2nd Quarter                9 3/8           7 3/4         7               5 1/8
                  3rd Quarter                9 3/16          7 1/2         8 3/8           6 3/8
                  4th Quarter                8 3/4           6 5/8         9 1/8           8 1/8

</TABLE>
The Class A Common  Stock is  identical to the Common Stock except that it gives
the holder one-tenth  (1/10) vote per share,  voting together with the Company's
Common Stock as a single class on all matters  except the election of directors.
For election of directors,  the Class A Common  shareholders  vote as a class to
elect 25% of the members of the Board of Directors.

The Company has not declared or paid a cash dividend since its  organization and
has no present intention of paying any such dividend in the foreseeable  future.
The Company intends to retain all available cash for the operation and expansion
of its business. In addition, the Company's present loan agreement restricts the
payment of dividends.


                                  36

<PAGE>


EXHIBIT 23.01


INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Benihana Inc. on Form S-8 of our report dated May 9, 1997 appearing in the
Annual Report on Form 10-K of Benihana Inc. for the year ended March 30, 1997.




Deloitte & Touche LLP
Miami, Florida
May 21, 1997

                                  37

<PAGE>


EXHIBIT 23.02



INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Benihana Inc. on Form S-3 of our report dated May 9, 1997 appearing in the
Annual Report on Form 10-K of Benihana Inc. for the year ended March 30, 1997,
and to the reference to us under the heading "Experts" in the Prospectus, which
is a part of this Registration Statement.





Deloitte & Touche LLP
Miami, Florida
May 21, 1997

                                 38

<PAGE>