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 29, 1998

                                    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 29, 1998,  3,571,616  shares of Common Stock and  2,517,463  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
$40,680,246.

                   DOCUMENTS INCORPORATED BY REFERENCE

Portions of the  Registrant's  Annual Report to Stockholders  for the year ended
March 29, 1998 are incorporated by reference in Parts I and II.

Portions of the  Registrant's  Proxy Statement for the Annual Meeting to be held
August 27, 1998 are incorporated by reference in Part III.

                                     1

<PAGE>



Item 1.  General

Benihana Inc. ("the Company") the leading operator of Japanese  teppanyaki-style
restaurants in the United States, currently owns and operates 49 restaurants and
franchises  twelve others.  The Company has achieved 23 consecutive  quarters of
comparable  quarter  sales  growth  and  customer  count  increases.  Management
attributes this success to (i) a  well-established  brand identity  supported by
consistent  marketing and promotional  activities since the opening of the first
Benihana  restaurant  in  1964,  (ii)  growing  consumer  demand  for  a  dining
experience that features a theme or entertainment component, (iii) the Company's
continued  emphasis on quality and customer  satisfaction,  and (iv)  Benihana's
experienced management team.

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 Benihana
of Tokyo,  Inc. ("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  $99,062,000 for the
fiscal year ended March 29, 1998, as compared to  approximately  $84,415,000 for
the prior fiscal year. The pro forma  revenues,  as if the acquisition of Rudy's
Restaurant Group,  Inc.  ("Rudy's") were completed as of the beginning of fiscal
years 1998 and 1997 were $111,153,000 and $100,760,000, respectively.

Recent Developments

In December 1997,  the Company  completed its  acquisition of Rudy's  Restaurant
Group, Inc., an operator of nine teppanyaki-style  restaurants. This acquisition
expanded the Company's geographic presence into Cleveland, Detroit, Minneapolis,
Pittsburgh and also expanded the Company's presence in the Miami, Cincinnati and
Washington, D.C. markets.

On May 18,  1998,  Rocky H.  Aoki  resigned  as  Chairman  of the  Board,  Chief
Executive  Officer and as a Director of the Company.  Joel A. Schwartz,  who has
been President and a Director since 1982,  will discharge the additional  duties
of Chief Executive Officer.

Benihana Concept

The Company offers casual upscale  dining in a distinctive  Japanese  atmosphere
enhanced by the unique  entertainment  provided by the Company's  highly-skilled
Benihana  chefs who prepare  fresh  steak,  chicken  and seafood in  traditional
Japanese  style  at  the  customer's  table.  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,
rice, a vegetable and an entree of steak, seafood, chicken or any 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 $22.32 during the fiscal year ended March
29, 1998. During such fiscal year, beverage sales in both the lounges and dining
rooms accounted for  approximately  20% of total  restaurant  sales. The Company
offers  sushi at the  teppanyaki  grill in all its  restaurants  and at separate
sushi bars within most restaurants.

An entire  teppanyaki table generally seats eight to ten customers.  The chef is
assisted in the service of the meal by the waitress or waiter who takes beverage
and food orders.  An entire  dinner time meal takes  approximately  one hour and
thirty minutes.

Of the 49 owned Benihana restaurants,  32 are located in free-standing,  special
use restaurant  buildings,  six in shopping  centers,  and 11 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,
traditional  Benihana restaurant 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.  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.  A typical Benihana restaurant has 18 teppanyaki tables. The Benihana
restaurants  seat  from 86 to 178  customers  in the  dining  rooms and 8 to 120
customers in the bar lounge areas. See "Properties."

                                   2

<PAGE>

Restaurant Operations

The  Company's   restaurants  are  centrally   managed  by  the  Executive  Vice
President-Restaurant  Operations and are divided among seven geographic regions,
each managed by a regional  manager.  Food  preparation  in the  restaurants  is
supervised by eight regional chefs.

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, assistant managers
and head chefs. 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 the 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.  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.

Marketing

The Company utilizes television, radio, billboard and print media to promote its
restaurants,  strengthen its brand identity and maintain high name  recognition.
The  advertising  programs  are tailored to each local market and to print media
focused  on the  business  traveler.  The  advertising  program is  designed  to
emphasize the inherently fresh aspects of a Benihana meal and the  entertainment
value of the food  preparation  at the table.  In fiscal year 1998,  the Company
expended $5.5 million on advertising and other marketing,  approximately 5.6% of
net sales.  The  entertainment  value of the Benihana method of food preparation
and  service  is  emphasized  to  distinguish  Benihana  from  other  restaurant
concepts.

Franchising

Although the Company has not actively marketed franchises, the Company has, from
time to time,  franchised  experienced  restaurant  operators  (such  as  Hilton
Hotels)  in  markets  in which it  considers  expansion  to be of benefit to the
Benihana  system.  The  Company  intends to continue  this policy as  attractive
opportunities arise.

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

The current standard franchise  agreement provides for payment to the Company of
a  non-refundable  franchise  fee of  $30,000  to  $50,000  per  restaurant  and
royalties of 3% to 6% of sales.  In fiscal year 1998 revenues  from  franchising
were $695,000.

The Company  presently  franchises  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.  


                                   3

<PAGE>



To comply with the terms of these  franchises  entered  into by the Company in
the United States, the Company is prohibited from opening additional restaurants
within certain areas which the Company's existing  franchises have the exclusive
right to open  additional  Benihana  restaurants.  In  general,  such  franchise
agreements  currently provide for an initial payment to Benihana with respect to
each new restaurant  opened by a franchisee and continuing  royalty  payments to
the Company based upon a percentage of a franchisee's gross sales from each such
restaurant throughout the term of the franchise.
Trade Names and Service Marks

Benihana is Japanese for "red flower".  In the United States, the "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 and certain foreign
countries.  As a result of its  acquisition  of Rudy's,  the  Company  also owns
registered trademarks relating to the Samurai and Kyoto concepts.

BOT continues to own the rights to the Benihana name and  trademarks  outside of
the United  States,  Central and South  America and the Caribbean  Islands.  The
Company has no financial interest in any restaurant operated by BOT.

Employees

At March 29, 1998,  the Company  employed 2,274  persons,  of which,  2,228 were
restaurant  employees and 46 were corporate  personnel.  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  relationship  with its employees is good.
None of the Company's employees are covered by collective bargaining agreements.

Competition

The casual  dining  segment of the  restaurant  industry  is  expected to remain
intensely competitive with respect to price, service, location, and the type and
quality  of  food.  Each  of the  Company's  restaurants  competes  directly  or
indirectly  with  locally-owned  restaurants  as well as regional  and  national
chains, and several of the Company's significant  competitors are larger or more
diversified and have  substantially  greater  resources than the Company.  It is
also  anticipated  that  growth  in  the  industry  will  result  in  continuing
competition for available  restaurant sites as well as continued  competition in
attracting and retaining qualified  management-level  operating  personnel.  The
Company  believes that its competitive  position is enhanced by offering quality
food selections at an appropriate price with the unique  entertainment  provided
by its chefs in an attractive, relaxed atmosphere.

Government 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  failure in  obtaining  the  required  licensing  or  requisite
approvals  could  result  in  delays  or  cancellations  in the  opening  of new
restaurants; termination of the liquor license for any Benihana restaurant would
adversely affect the revenues for the restaurant.  While the Company to date has
not experienced any material difficulties in obtaining and maintaining necessary
governmental approvals, the failure to obtain or retain, or a delay in obtaining
food and  liquor  licenses  or any other  governmental  approvals  could  have a
material adverse effect on the Company's  operating  results.  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 franchisee and franchisor.

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



                                   4

<PAGE>



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  wage rates,  and  accordingly,  increases in any such
minimum wage will increase the Company's labor costs.

Management Information Systems

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.

Properties

Of the 49 restaurants  operated by the Company, 43 are leased pursuant to leases
which require either a specific  monthly rental or a minimum rent and additional
rent based upon a percentage of gross sales. Generally, these leases are "triple
net" leases which pass increases in property  operating  expenses,  such as real
estate taxes and utilities,  through to the Company as tenant.  Expiration dates
of these leases, including renewal options, range from May, 1999 to March, 2027.



                                   5

<PAGE>



The  following  table sets forth the  location of the  restaurants  owned by the
Company:
<TABLE>
<CAPTION>
                                                           Approximate Seating
                                     Approx.               -------------------
                                    Sq. Ft. of       Dining                       Sushi          Opening
Benihana Location                    Building        Room         Lounge           Bar             Date
-----------------                   ----------       ------       ------          -----          -------
<S>                                 <C>              <C>          <C>             <C>            <C>
CALIFORNIA:

   2100 E. Ball Road
   Anaheim, CA (1)                  8,710            160             67             36           March, 1980

   1496 Old Bayshore Hwy.
   Burlingame, CA (2)               8,740            160             99             27           February, 1978

   17877 Gale Avenue
   City of Industry, CA (1)         8,000            144             50             30           November, 1988

   1989 Diamond Blvd.
   Concord, CA (1)                  8,250            144             84             18           February, 1980

   2074 Vallco Fashion Pk.
   Cupertino, CA (1)                7,937            144             45             8            July, 1980

   16226 Ventura Blvd.
   Encino, CA  (2)                  7,790            152             64                          October, 1970

   14160 Panay Way
   Marina Del Rey, CA (1)           4,840            96              66             6            March, 1972

   4250 Birch Street
   Newport Beach, CA (3)            8,275            144             72             26           March, 1978

   5489F Sunrise Blvd.
   Citrus Heights
   Sacramento, CA (1)               3,798            88              8              5            October, 1995

   477 Camino Del Rio So.
   San Diego, CA  (1)               7,981            144             68             23           May, 1977

   1737 Post Street
   San Francisco, CA (1)            7,990            140             45                          December, 1980

   21327 Hawthorne Blvd.
   Torrance, CA (1)                 7,430            128             63             28           May, 1980


(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 fixed plus a percentage of profits.
</TABLE>

                                      6

<PAGE>
<TABLE>
<CAPTION>

                                                             Approximate Seating
                                      Approx.                -------------------
                                    Sq. Ft. of       Dining                       Sushi          Opening
Benihana Location                    Building         Room         Lounge          Bar             Date
-----------------                   ----------       ------        ------         -----          -------
<S>                                 <C>              <C>           <C>            <C>            <C>
COLORADO:

   3295 S. Tamarac Dr.
   Denver, CO (1)                   7,572            128             82             10           February, 1977

DISTRICT OF COLUMBIA:

   3222 M Street, NW
   Washington, DC (2)               7,761            136             4              24           May, 1981

FLORIDA:

   276 E. Commercial Blvd.
   Ft. Lauderdale, FL               8,965            160             70                          June, 1970

   8727 South Dixie Hwy.
   Miami, FL  (2)                   8,700            122             66             15           March, 1989
   (Kendall)

   8717 S.W. 136th St.
   Miami, FL (1)                    8,162            176             42                          April, 1981

   1665 N.E. 79th St.
   Miami Beach, FL                  8,938            178             86             42           September, 1973

   1751 Hotel Plaza Blvd.
   Lake Buena Vista, FL (2)         8,145            128             85             7            October, 1988
   (Orlando)

   3602 S.E. Ocean Blvd.
   Stuart, FL                       8,485            160             69             57           February, 1977

GEORGIA:

   2143 Peachtree Rd., NE
   Atlanta [I], GA (2)              8,244            136             65             16           May, 1974

   229 Peachtree St. NE
   Atlanta [II], GA (1)             6,372            115             34             11           April, 1981



(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>

                                                            Approximate Seating
                                      Approx.               -------------------
                                    Sq. Ft. of       Dining                       Sushi          Opening
Benihana Location                    Building         Room         Lounge          Bar             Date
-----------------                   ----------       ------        ------         -----          -------
<S>                                 <C>              <C>           <C>            <C>            <C>
ILLINOIS:

   166 East Superior St.
   Chicago, IL (1)                  7,288            144          9               45             April, 1968

   747 E. Butterfield Rd.
   Lombard, IL                      9,200            168          51                             April, 1985

   1200 E. Higgins Road
   Schaumburg, IL                   8,388            160          48                             July, 1992

INDIANA:

   8830 Keystone Crossing Rd.
   Indianapolis, IN (1)             8,460            144          93                             February, 1979

KENTUCKY:

   1510 Lake Shore Court
   Louisville, KY (1)               7,572            128          88                             July, 1978

MARYLAND:

   7315 Wisconsin Ave.
   Bethesda, MD (1)                 6,047            128          47              11             October, 1974

MICHIGAN:

   18601 Hubbard Dr.
   Dearborn, MI (1)                 7,500            136          40              46             March, 1977

   21150 Haggerty Rd.
   Northville, MI (2)               8,000            153          20              11             May, 1989
   (Farmington Hills)

   1985 W. Big Beaver Rd.
   Troy, MI (1)                     8,600            128          46              57             February, 1996


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

                                       8

<PAGE>
<TABLE>
<CAPTION>

                                                            Approximate Seating
                                     Approx.                -------------------
                                    Sq. Ft. of       Dining                       Sushi          Opening
Benihana Location                    Building         Room         Lounge          Bar             Date
-----------------                   ----------       ------        ------         -----          -------
<S>                                 <C>              <C>           <C>            <C>            <C>
MINNESOTA:

   850 Louisiana Ave. So.
   Golden Valley, MN                10,400           192          45                             September, 1980

NEW JERSEY:

   840 Morris Turnpike
   Short Hills, NJ (2)              11,500           144          56              56             October 1976

   5255 Marlton Pike
   Pennsauken, NJ (1)               7,000            136          93              10             February, 1978
   (Cherry Hill)

NEW YORK:

   120 East 56th St.
   New York, NY (2)                 3,859            86           24                             May, 1966

   47 West 56th St.
   New York, NY (1)                 7,340            112          59                             June, 1973

   2105 Northern Blvd.
   Munsey Park, NY (1)              8,252            144          88              75             December, 1978
   (Manhasset)

OHIO:

   50 Tri-County Parkway
   Cincinnati, OH (1)               7,669            144          91                             June, 1978

   126 East 6th St.
   Cincinnati, OH (1)               5,800            112          30                             August, 1979

   23611 Chagrin Blvd.
   Beachwood, OH (1)                10,300           188          85                             May, 1973
   (Cleveland)

OREGON:

   9205 S.W. Cascade Ave.
   Beaverton, OR  (1)               6,077            112          54              34             August, 1986



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

</TABLE>
                                     9

<PAGE>
<TABLE>
<CAPTION>

                                                            Approximate Seating
                                     Approx.                -------------------
                                    Sq. Ft. of       Dining                       Sushi          Opening
Benihana Location                    Building         Room         Lounge          Bar             Date
-----------------                   ----------       ------        ------         -----          -------
<S>                                 <C>              <C>           <C>            <C>            <C>
PENNSYLVANIA:

   2100 Greentree Rd.
   Pittsburgh, PA (1)               8,000            150          84                             May, 1971

TENNESSEE:

   912 Ridgelake Blvd.
   Memphis, TN  (1)                 8,680            144          78              11             October, 1979

TEXAS:

   7775 Banner Dr.
   Dallas, TX  (2)                  8,007            160          115                            January, 1976

   3848 Oak Lawn Ave.
   Dallas, TX (1)
   (Turtle Creek)                   3,998            96           0               10             June, 1997

   1318 Louisiana St.
   Houston [I], TX  (2)             6,938            128          60              12             May, 1975

   9707 Westheimer Rd.
   Houston [II], TX  (1)            7,669            144          120             10             November, 1977

   2579 Town Center Blvd.
   Sugar Land, TX (1)               3,800            96           0               17             July, 1997

UTAH:

   165 S.W. Temple, Bldg. 1
   Salt Lake City, UT (1)           7,530            120          72              10             April, 1977



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

                                     10

<PAGE>

The Company  leases  approximately  10,100  square feet of space for its general
administrative offices in Miami at an annual rental of $172,000 and 8,000 square
feet for a warehouse  also in Miami at an annual  rental of $25,000.  The leases
expire May 31, 1999 and October 31, 1998, 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.


                                     11

<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 1998 Annual Report to Shareholders.

Item 6.  Selected Consolidated Financial Data

The  information  required by this Item is  incorporated  herein by reference to
page 7 of the Company's 1998 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 8 through 11 of the Company's 1998 Annual Report to Shareholders.

Item 8.  Financial Statements and Supplementary Data

The information required by this Item is incorporated herein by reference to
pages 12  through 26 of the Company's 1998 Annual Report to Shareholders.

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

None.

                                   12

<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  August  27,  1998  (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 Certain
Beneficial  Owners 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 14 of the  Proxy  Statement  is  incorporated
herein by reference.


                                  13

<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 12  through 26 of
              the Company's 1998 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  29,  1998 and March 30,
              1997.

              Consolidated  Statements of Income for the  fifty-two  weeks ended
              March 29,  1998,  the  fifty-two  weeks  ended  March 30, 1997 and
              fifty-three weeks ended March 31, 1996.

              Consolidated  Statements of Stockholders' Equity for the fifty-two
              weeks ended March 29, 1998,  the  fifty-two  weeks ended March 30,
              1997 and fifty-three weeks ended March 31, 1996.

              Consolidated  Statements  of Cash  Flows for the  fifty-two  weeks
              ended March 29, 1998, the fifty-two weeks ended March 30, 1997 and
              the fifty-three weeks ended March 31, 1996.

              Notes to Consolidated Financial Statements.

              Report of Independent Accountants.

         2.   Financial Statement Schedules:

              None

         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. Incorpo-
                           rated 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.

              4.04         Warrant Agreement dated December 1, 1997 between
                           Benihana and Douglas M. Rudolph.  Incorporated by
                           reference to Exhibit 4.1 to the Company's current
                           report on Form 8-K dated December 1, 1997.

              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.

                                     14

<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 April 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 R. 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,

              10.14        Amendment  dated  December  11,  1997  to  Employment
                           Agreement  dated May 15, 1995  between  Rocky H. Aoki
                           and the Company.

              10.15        Amendment dated May 18, 1998 to Employment  Agreement
                           dated May 15,  1995 and  amended  December  11,  1997
                           between Rocky H. Aoki and the Company.

              10.16        Amendment dated December 11, 1997 to Employment
                           Agreement dated May 15, 1995 between Joel A. Schwartz
                           and the Company.

              10.17        Amendment  dated  December  11,  1997  to  Employment
                           Agreement  dated April 1, 1995 between Taka Yoshimoto
                           and Benihana Inc.

              10.18        Amendment dated December 11, 1997 to Employment
                           Agreement dated January 1, 1995 between Michael R.
                           Burris and Benihana Inc.

              10.19        1997 Employees Class A Stock Option Plan.  Incorp-
                           orated by reference to Exhibit A of Benihana Inc.'s
                           Proxy Statement for its Annual Meeting of
                           Stockholders to be held August 27, 1998.

              10.20        Amendments  to  the  Directors'  Stock  Option  Plan.
                           Incorporated  by  reference  to Exhibit B of Benihana
                           Inc.'s  Proxy  Statement  for its  Annual  Meeting of
                           Stockholders to be held August 27, 1998.


                                     15

<PAGE>

              13.01        Portions of Annual Report to Stockholders for the
                           year ended March 29, 1998.

              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.

                                    16

<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:    June 23, 1998          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/ Joel A. Schwartz           President and                     June 23, 1998
------------------------       Director (Principal
Joel A. Schwartz               Executive Officer)


/s/ Taka Yoshimoto             Exeuctive Vice President -        June 23, 1998
------------------------       Restaurant Operations
Taka Yoshimoto                 and Director


/s/ Norman Bcker               Director                          June 23, 1998
------------------------
Norman Becker


/s/ Robert B. Greenberg        Director                          June 23, 1998
------------------------
Robert B. Greenberg


/s/ John E. Abdo               Director                          June 23, 1998
------------------------
John E. Abdo


/s/ Michael R. Burris          Vice President of Finance         June 23, 1998
------------------------       and Treasurer
Michael R. Burris              (Chief Financial Officer and
                               Principal Accounting Officer)

/s/ Darwin C. Dornbush         Secretary and Director            June 23, 1998
------------------------
Darwin C. Dornbush


                                   17

<PAGE>

EXHIBIT 13.01 - SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
                                                                    Years Ended
                                                                    -----------
                                        March 29,      March 30,      March 31,       March 26,      March 27,
                                          1998           1997           1996            1995           1994
                                        ---------      ---------      ---------       ---------      ---------
<S>                                     <C>            <C>            <C>             <C>            <C>
                                             (In thousands, except per share information)
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:

Net restaurant sales                    $99,062        $84,415        $81,094         $72,772        $69,315
Total revenues                           99,757         85,204         81,606          73,264         69,766
Cost of sales                            25,894         21,658         21,128          20,744         19,000
Restaurant expenses                      58,517         51,246         48,676          44,020         43,354
General and administrative
    expenses                              5,408          4,217          4,801           4,841          4,167
Interest expense, net                     1,076            904          1,226           1,140          1,202
Income before taxes                       8,862          7,179          5,775           2,519          1,616
Net income                                5,940          4,947          4,410           2,751          2,039
EBITDA                                   12,938         10,510          9,157           6,027          5,593
Pro forma basic earnings
    per common share (1)                    .96            .81            .73             .42            .30
Pro forma diluted earnings
    per common share (1)                    .93            .77            .70             .41            .30

CONSOLIDATED BALANCE SHEET
DATA:

Total assets                            $58,157        $40,562        $36,257         $33,722        $34,220
Long-term debt including
    current maturities                   16,840          6,543          7,495           9,178          7,514
Stockholders' equity                     28,223         22,754         17,326          12,205         14,799
Capital expenditures                      5,079          2,818          2,156           1,264             782


</TABLE>
(1)  The pro forma basic and diluted  earnings  per common  share were  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 1996, 1995 and 1994 as a
     result of the acquisition of the BOT Restaurants in fiscal year 1996, which
     was accounted for in a manner similar to a pooling of interests,  have been
     factored in the  calculation of pro forma earnings per common share for all
     periods that are presented prior to the acquisition.


                                    18

<PAGE>



Overview

Benihana Inc. (the "Company") ended fiscal 1998 with its best ever revenues, net
income and earnings per share amounts.  Revenues  totaled  $99,757,000 in fiscal
1998 as compared to $85,204,000  in fiscal 1997 and  $81,606,000 in fiscal 1996.
Net income totaled $5,940,000 in fiscal 1998 as compared to $4,947,000 in fiscal
1997 and  $4,410,000 in fiscal 1996.  Earnings per share for fiscal 1998 reached
$.93 per share as  compared  to $.77 per share in fiscal 1997 and $.70 per share
in fiscal 1996.

During fiscal 1998, the Company  completed the acquisition of Rudy's  Restaurant
Group, Inc. ("Rudy's") an operator of nine teppanyaki-style Japanese restaurants
in Florida, Ohio, Michigan,  Minnesota,  Pennsylvania and Washington, D.C. under
the names  Samurai and Kyoto.  This  acquisition  was  executed as a part of the
Company's  strategy to acquire  complementary  restaurants  in the ethnic  Asian
restaurant  niche taking  advantage of the Benihana brand name  recognition  and
operating  expertise.  Additionally,  the Company opened two new  restaurants in
Dallas, Texas and Sugar Land, Texas.

At March 29, 1998,  the Company owned 49 restaurants  and franchised  another 12
restaurants.

The Company's  revenues  consist of sales of food and beverages  sold in each of
the owned  restaurants  and franchise  fees received from  franchisees.  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
                                          1998         1997         1996
                                         -------      -------      -------
<S>                                      <C>          <C>          <C>
Net restaurant sales                     $99,062      $84,415      $81,094
Other income                                 695          789          512
                                         -------      -------      -------

Total Revenues                           $99,757      $85,204      $81,606
                                         =======      =======      =======


                                                   YEAR ENDED MARCH
                                              1998         1997         1996
                                             -------      -------      -------
<S>                                          <C>          <C>          <C>
Amount of change from the previous year      $14,553      $ 3,598      $ 8,342

Percentage change from the previous year       17.1%         4.4%        11.4%

Comparable sales per restaurant              $ 2,410      $ 2,221      $ 2,138

Percentage growth in comparable sales
   per restaurant                               8.5%         3.9%         8.7%

</TABLE>
Year ended March 29, 1998 compared to March 30, 1997 -- Total  restaurant  sales
increased  $14,647,000  over fiscal 1997.  The increase in sales was a result of
the Rudy's  acquisition  completed  on December 1, 1997,  the opening of two new
restaurants  and an increase in guest counts at units opened for longer than one
year. The nine restaurants  acquired from Rudy's  represented  $5,994,000 of the
increase. The two new restaurants represented $1,475,000 of the increase.  Guest
counts at units  opened for longer than one year  increased  by 295,751  guests,
contributing  $7,178,000  to the  increase.  The average  check size in 1998 was
$22.32  compared to $22.42 in 1997. The decrease in the average check amount was
a result of an increased proportion of lunch traffic which has significantly

                                   19

<PAGE>

lower check  averages  than dinner  check  averages.  The average dinner check
increased to $24.79 in 1998 compared to $24.73 in 1997. The average lunch check
increased to $13.54 in 1998 compared to $13.38 in 1997.

The  Company  continues  to benefit  from a strong  economy  and from  favorable
consumer  responses to the  Company's  concept and to the growing  popularity of
sushi  products,  which is  offered  at  either  separate  sushi  bars or at the
teppanyaki grills in all of the Company's restaurants.

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 bars at six restaurants,  from physical
improvements made to several  restaurant  properties and from favorable consumer
trends  in the  markets  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.

Costs and Expenses

Cost 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
                                                                1998          1997         1996
                                                                -----         -----        -----
<S>                                                             <C>           <C>          <C>
COST AS PERCENTAGE OF RESTAURANT SALES:
Cost of restaurant food and beverage sales                      26.1%         25.7%        26.1%
Restaurant expenses                                             59.1%         60.7%        60.0%
General and administrative expenses                              5.5%          5.0%         5.9%

AMOUNT OF CHANGE FROM PREVIOUS
YEARS (IN THOUSANDS):
Cost of restaurant food and beverage sales                      $4,236        $  530       $  384
Restaurant expenses                                             $7,271        $2,570       $4,656
General and administrative expenses                             $1,191        $ (584)      $  (40)

Percentages increase(decrease):
Cost of restaurant food and beverage sales                      19.6%          2.5%           .2%
Restaurant expenses                                             14.2%          5.3%         10.6%
General and administrative expenses                             28.2%        (12.2%)         (.1%)
</TABLE>
Year ended  March 29,  1998  compared  to March 30, 1997 -- The cost of food and
beverage  sales  increased  in  total  dollar  amount  and when  expressed  as a
percentage  of  sales.  The  increase  in  cost  of  sales  as a  result  of the
aforementioned  increase  in  customer  counts was  $3,865,000.  Commodity  cost
increases, principally higher seafood costs, represented the remaining amount of
the increase in cost of sales.

Restaurant  expenses increased in total amount but decreased when expressed as a
percentage of sales. The nine  restaurants  acquired during the year represented
$3,315,000 of the increase. The aforementioned increase in sales has effected an
increase in absolute  amount in those  expenses  having a direct  correlation to
sales such as credit card processing  expenses and percentage  rent expense.  In
addition,  advertising and promotional  expenses  increased due to the Company's
efforts  to  expand  media  exposure  for its sushi  bars.  Rudy's  spending  on
advertising  was  significantly  less  than that of the  Company.  Consequently,
restaurant  expenses  decreased as a percentage  of sales.  The Company plans to
increase the amount spent on advertising relating to the Rudy's restaurants, and
accordingly,  results  of  operations  may not be  indicative  of  results to be
expected in future periods.

General  and  administrative  expenses  increased  in total  dollar  amount when
compared to the comparable periods of the prior year. The increase resulted from
increases in salaries and benefits, miscellaneous expenses and depreciation and

                                   20

<PAGE>

amortization.  The increase in salaries and benefits  resulted from increases
in the base salary of  executive  officers in  accordance  with amended and or
new  employment  agreements  and from the  hiring of  additional personnel.  The
increase in miscellaneous  expenses  reflects a one time expense associated with
the  acquisition of Rudy's.  The increase in  depreciation  and amortization
expense resulted from the amortization of goodwill relating to the
acquisition of Rudy's.

Interest  expense  increased in the current year as a result of additional  bank
borrowings of $9,400,000 to acquire Rudy's.

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.  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.

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.

Income Taxes

The Company's  effective tax rate  increased to 33.0% in 1998 from 31.1% in 1997
and from  23.6% in 1996.  The  increase  from 1997 to 1998 was a result of state
income tax refunds of $160,000  received in 1997. The increase from 1996 to 1997
was a result of federal  tax  benefits  of net  operating  loss  carry  forwards
exhausted in 1996.

Liquidity and Capital Resources

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

The Company requires capital principally for the development of new restaurants,
acquisition of other restaurant  businesses,  and the  refurbishment of existing
restaurant  units. On December 1, 1997, the Company completed the acquisition of
Rudy's for approximately $20,000,000 of cash. In addition, a warrant for 200,000
shares of the Company's  Class A Stock was issued at an exercise  price of $8.00
per share.  The  acquisition  was financed,  in part, with the proceeds of a new
Credit  Agreement  consisting  of a  $12,000,000  term  loan  and a  $15,000,000
revolving  line of credit.  Interest under the Credit  Agreement  accrues at the
Company's  option at either prime rate plus a margin up to 1.0% or at LIBOR plus
a margin of 1.0% to 2.25%.  The applicable  interest rate margin varies with the
Company's  leverage ratio  (defined as EBITDA  divided by funded  indebtedness).
Principal  of the term loan is  payable at a rate of  $1,000,000  in each of the
next two years,  $2,000,000 in each of years three and four,  and  $3,000,000 in
each of years five and six  revolving  line of credit is  payable  in 2002.  The
proceeds  under the  credit  agreement  were  also  used to  retire  outstanding
borrowings  under  a  previous  loan  agreement  in the  approximate  amount  of
$5,700,000.  The credit  agreement  restricts  the Company from making  dividend
payments  and  purchases  of the  Company's  common  equity and  limits  capital
expenditures  to  $8,500,000  for fiscal  1998,  $8,600,000  for fiscal 1999 and
$8,000,000  annually thereafter plus amounts in excess of certain operating cash
flow targets and amounts of cash provided from offerings of common  equity.  The
credit  agreement  also  requires  the  Company  to  achieve  certain  ratios of
operating cash flow to debt and other financial benchmarks.

As of March 29, 1998, the Company had available  $12,000,000  under the revolver
facility.  Management  believes  that the amount  available  under the  revolver
facility  together  with  internally  generated  funds from  operations  provide
sufficient  cash  resources  for  anticipated  capital  improvements  as well as
construction and opening of new restaurants.

                                     21
<PAGE>

The Company has signed  leases for three new  restaurants.  Estimated  remaining
expenditures  to  complete  construction  and open  these  new  restaurants  are
expected to be $2,300,000. Two of the new restaurants will be operated under the
Company's  new sushi  concept,  Sushi  Doraku in Fort  Lauderdale,  Florida  and
Chicago,  Illinois.  The third restaurant will operate as a traditional Benihana
in Ontario, California. The Fort Lauderdale Sushi Doraku restaurant is estimated
to open in the summer of 1998 and the other two  restaurants  are  projected  to
open in the winter of 1998.

During the current year, the Company redeemed $1,000,000 of preferred stock. The
Company is restricted by the new credit  agreement as to the aggregate amount of
preferred stock that it can redeem to an amount not to exceed $1,000,000 in each
of the fiscal years ending in 1998 and 1999 only.

Forward-Looking Information

This Annual Report contains  certain forward looking  statements  concerning the
Company.  Management  believes its expectations  which are based upon reasonable
assumptions  are  reflected  in such forward  looking  statements.  However,  no
assurance can be or is given that such  expectations will prove correct and that
actual results and developments may differ  materially.  Important  factors that
could cause actual results to differ include  fluctuation in commodity prices on
which the  Company's  food  costs  depend,  competition  within  the  restaurant
industry,  changes in  consumer  dining  preferences,  changes  in  governmental
regulation,  fluctuation in the general economy, harsh weather,  competition for
skilled and unskilled  restaurant  employees,  legal claims, and availability of
favorable restaurant locations,  and other factors as set forth in the Company's
Form 10-K filed with the Securities Exchange Commission.

Year 2000

The well  publicized  "Year 2000" issue  relates to computer  programs that were
written using only two digits  rather than four digits to define the  applicable
year in date sensitive programs in calculating and processing computerized data.
The Company has  reviewed the Year 2000 issue  internally  and with its software
vendors.  The  Company  believes  that  the  costs  and the  operational  impact
associated with Year 2000 compliance will not be material.

                                    22

<PAGE>

BENIHANA INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS

 (In thousands, except per share information)
<CAPTION>
Year ended                                                             March 29,      March 30,      March 31,
                                                                         1998           1997           1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>            <C>            <C>

Revenues

Net restaurant sales                                                   $99,062        $84,415        $81,094
Other income, principally franchise fees and royalties                     695            789            512
-------------------------------------------------------------------------------------------------------------------

Total revenues                                                          99,757         85,204         81,606
-------------------------------------------------------------------------------------------------------------------

Costs and Expenses

Cost of restaurant food and beverage sales                              25,894         21,658         21,128
Restaurant expenses                                                     58,517         51,246         48,676
General and administrative expenses                                      5,408          4,217          4,801
Interest expense                                                         1,076            904          1,226
-------------------------------------------------------------------------------------------------------------------

Total costs and expenses                                                90,895         78,025         75,831
-------------------------------------------------------------------------------------------------------------------

Income from operations before income taxes                               8,862          7,179          5,775
Income tax provision (Note 11)                                           2,922          2,232          1,365
-------------------------------------------------------------------------------------------------------------------

Net Income                                                             $ 5,940        $ 4,947        $ 4,410
-------------------------------------------------------------------------------------------------------------------


Earnings Per Share
    Basic earnings per common share                                    $   .96        $   .81        $  .73
    Diluted earnings per common share                                  $   .93        $   .77        $  .70
-------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements

                                   23

<PAGE>

BENIHANA INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED BALANCE SHEETS

 (In thousands, except share information)
<CAPTION>
                                                                                    March 29,        March 30,
                                                                                      1998             1997
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>
Assets
Current assets:
     Cash and cash equivalents                                                      $  1,169         $  7,043
     Receivables (net of allowance for doubtful accounts of $0
          in 1998 and $27 in 1997, respectively) (Note 10)
         Trade                                                                           202              218
         Other                                                                           183              324
-------------------------------------------------------------------------------------------------------------------

     Total receivables                                                                   385              542
     Inventories (Notes 4, 10)                                                         3,768            3,148
     Prepaid expenses (Note 5)                                                           758              837
-------------------------------------------------------------------------------------------------------------------

Total current assets                                                                   6,080           11,570

Property and equipment, net (Notes 6, 9, 10)                                          32,998           25,416
Deferred income taxes, net (Note 11)                                                   3,781            1,487
Goodwill, net (Note 2)                                                                12,663
Other assets (Notes 7, 10)                                                             2,635            2,089
-------------------------------------------------------------------------------------------------------------------

                                                                                     $58,157          $40,562
-------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Equity
Current liabilities:
     Accounts payable and accrued expenses (Note 8)                                  $ 9,323          $ 7,018
     Current maturities of long-term debt and
         obligations under capital leases (Notes 9, 10)                                1,939            1,436
-------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                             11,262            8,454

Long-term debt (Note 10)                                                              15,233            5,271
Due to Affiliates, long-term (Note 10)                                                   174              312
Obligations under capital leases (Note 9)                                              3,265            3,771

Stockholders' Equity (Note 12):
     Series A  Convertible  Preferred  stock  - $1.00  par  value;  authorized  -
       5,000,000 shares, issued and outstanding -
       1,000 shares and 2,000 shares, respectively                                         1                2
     Common stock - $.10 par value; convertible into Class A
       Common, authorized - 12,000,000 shares, issued and
       outstanding - 3,571,116 and 3,557,366 shares, respectively                        357              356
     Class A Common stock - $.10 par value; authorized -
       20,000,000 shares, issued and outstanding -
       2,517,463 and 2,516,300 shares, respectively                                      252              252
     Additional paid-in capital                                                       14,600           14,978
     Retained earnings                                                                13,129            7,282
     Treasury stock - 9,177 shares at cost                                              (116)            (116)
-------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                            28,223           22,754
-------------------------------------------------------------------------------------------------------------------

                                                                                     $58,157          $40,562
-------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements


                                      24

<PAGE>

BENIHANA INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share information)
<CAPTION>


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


Balance, March 26, 1995                       $      2    $  349    $  232     $13,337      $(1,715)      $  -       $12,205
  Issuance of 22,700 shares of stock under
    exercise of options                                        3                    73                                    76
  Issuance of 450 shares of stock
    for incentive compensation                                                       5                                     5
  Tax benefit resulting from difference
    between book and tax bases of assets
    acquired from BOT                                                              870                                   870
  Dividend on preferred stock                                                                  (105)                    (105)
  Funds distributed to BOT                                                                     (135)                    (135)
  Net income                                                                                  4,410                    4,410
-----------------------------------------------------------------------------------------------------------------------------------

Balance, March 31, 1996                              2       352       232      14,285        2,455                   17,326
  Issuance of 41,000  shares of stock under
    exercise of options                                        4                   178                                   182
  Purchase of 9,177 shares of stock                                                                         (116)       (116)
  Dividend on preferred stock                                                                  (120)                    (120)
  Issuance of 300 shares of stock
    for incentive compensation                                                       3                                     3
  Issuance of 200,000 shares under
    exercise of warrants                                                20         512                                   532
  Net income                                                                                  4,947                    4,947
-----------------------------------------------------------------------------------------------------------------------------------

Balance, March 30, 1997                              2       356       252      14,978        7,282         (116)     22,754
  Fair market value of warrant issued in
    connection with the acquisition of Rudy's                                      563                                   563
  Redemption of preferred stock                     (1)                           (999)                               (1,000)
  Dividend on preferred stock                                                                   (93)                     (93)
  Issuance of 14,913 shares of stock
    under exercise of options                                  1                    58                                    59
  Net income                                                                                  5,940                    5,940
-----------------------------------------------------------------------------------------------------------------------------------

Balance, March 29, 1998                       $      1    $  357    $  252     $14,600      $13,129     $   (116)    $28,223
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements


                                 25

<PAGE>

BENIHANA INC. AND SUBSIDIARIES
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS

   (In thousands)
<CAPTION>
                                                                       March 29,      March 30,      March 31
                                                                         1998           1997           1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>             <C>            <C>
Operating Activities:
     Net income                                                       $ 5,940         $ 4,947        $ 4,410
     Adjustments to reconcile net income to net cash
          provided by operating activities:
       Depreciation and amortization                                    3,000           2,427          2,416
       Issuance of common stock for incentive compensation                                  3              5
       Deferred income taxes                                            1,043              90            676
       Change in operating assets and liabilities that provided
       (used) cash:
         Receivables                                                      233            (290)           149
         Inventories                                                     (264)         (1,315)          (274)
         Prepaid expenses                                                 135              83            377
         Other assets                                                    (494)           (124)            48
         Accounts payable and accrued expenses                          1,652             479           (412)
-------------------------------------------------------------------------------------------------------------------

Net cash provided by operating activities                              11,245           6,300          7,395
-------------------------------------------------------------------------------------------------------------------

Investing Activities:
     Payment for purchase of Rudy's Restaurant Group, Inc.,
         net of cash acquired (Note 2)                                (19,138)
     Expenditures for property and equipment                           (5,079)        (2,818)         (2,156)
     Increase in cash surrender value of life insurance policy            ( 1)           (35)            (30)
-------------------------------------------------------------------------------------------------------------------

Net cash (used in) investing activities                               (24,218)        (2,853)         (2,186)
-------------------------------------------------------------------------------------------------------------------

Financing Activities:
     Preferred stock redeemed                                          (1,000)
     Dividends paid on preferred stock                                    (93)          (120)           (105)
     Proceeds from issuance of long-term debt                          18,000                            319
     Repayment of long-term debt and obligations under
        capital leases                                                 (9,867)        (1,604)         (2,496)
     Net cash distributed to BOT                                                                        (135)
     Proceeds from issuance of common stock                                59            714              76
     Purchase of treasury stock                                                         (116)
-------------------------------------------------------------------------------------------------------------------

Net cash provided by (used in) financing activities                     7,099         (1,126)         (2,341)
-------------------------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents                   (5,874)         2,321           2,868
Cash and cash equivalents, beginning of year                            7,043          4,722           1,854
-------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                                 $1,169         $7,043          $4,722
-------------------------------------------------------------------------------------------------------------------

Supplemental Cash Flow Information
Cash paid during the fiscal year for:
   Interest                                                            $  860         $  733          $  809
   Income taxes                                                        $2,804         $2,061          $  353

Noncash investing and financing activities:
   Fair market value of warrant issued                                 $  563
   Non-competition agreement                                           $  684

Business acquisitions, net of cash acquired (Note 2):
   Fair value of assets acquired, other than cash                      $ 8,888
   Liabilities assumed                                                  (2,577)
   Purchase price in excess of the net assets acquired                  12,827
                                                                       -------
                                                                       $19,138
                                                                       =======
</TABLE>
See notes to consolidated financial statements

                                     26

<PAGE>

BENIHANA INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED MARCH 29, 1998, MARCH 30, 1997 AND MARCH 31, 1996

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Business - Benihana Inc. owns and operates 49 Japanese teppanyaki-style
         restaurants and franchises 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 accounts and 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. The years ended March 29,
         1998 and March 30, 1997 consisted of 52 weeks, and the year ended March
         31, 1996 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.

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

         Inventories  -  Inventories,  which consist  principally  of restaurant
         operating  supplies and food and  beverage,  are stated 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.

         Depreciation  and  Amortization -  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,  personal  computers,  software and
         related  equipment  - 3 years,  and  leaseholds  - lesser  of the lease
         terms,  including renewal options,  or useful life).  Goodwill is being
         amortized on a straight-line basis over a 25 year period, the estimated
         benefit  period  for the  business  acquired,  see Note 2.  Accumulated
         amortization of goodwill was $164,000 at March 29, 1998.

         Accounting  for  Long-Lived  Assets - In accordance  with  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," the Company  evaluates  its net  investment in restaurant
         properties  and goodwill for impairment  whenever  events or changes in
         circumstances indicate that the carrying amounts of an asset may not be
         recoverable.  During the  periods  presented,  no such  impairment  was
         incurred.

         Stock-Based Compensation - Pursuant to the alternative methods
         permitted under SFAS No.123, "Accounting for Stock-Based Compensation,"
         stock based compensation is determined using the intrinsic value
         method prescribed in Accounting Principles Board Opinion ("APB")
         No. 25, "Accounting for Stock Issued to Employees," and related
         interpretations.  Accordingly, compensation cost for stock options is

                                     27

<PAGE>

         measured as the excess, if any, of the quoted market price of the
         Company's  stock at the date of grant over the amount an employee must
         pay to acquire the stock (Note 12).

         Earnings  Per Share - During  fiscal 1998 the Company  adopted SFAS No.
         128,  "Earnings  per Share".  All prior year earnings per share amounts
         have been restated.

         Basic  earnings  per common  share is computed  by dividing  net income
         available  to common  shareholders  by the weighted  average  number of
         common shares  outstanding during each period. The diluted earnings per
         common share  computation  includes  dilutive common share  equivalents
         issued  under the  Company's  various  stock  option plans and dilutive
         convertible preferred stock.

         The computation of basic earnings per common share and diluted earnings
         per common share for each year is shown below (in thousands):

<TABLE>
<CAPTION>
                                                          March 29,      March 30,      March 31,
                                                            1998           1997           1996
                                                          ---------      ---------      ---------
<S>                                                       <C>            <C>            <C>
         Income from operations                           $5,940         $4,947         $4,410
         Pro forma adjustments (1)                                                         (26)
         Less preferred dividends                            (93)          (120)          (105)
         Less pro forma preferred dividends (1)                                            (15)
                                                          ------         ------         ------
         Income for computation of basic
           earnings per common share                       5,847          4,827          4,264
         Convertible preferred dividends                      93            120            120
                                                          ------         ------         ------
         Income for computation of diluted
           earnings per common share                      $5,940         $4,947         $4,384
                                                          ======         ======         ======

         Weighted average number of common
           shares used in basic EPS                        6,080          5,947          5,821
         Effect of dilutive securities:
           Stock options and warrants                         86            144            182
           Convertible preferred shares                      233            300            300
                                                          ------         ------         ------
         Weighted average number of common
           shares and dilutive potential common
           shares used in diluted EPS                      6,399          6,391          6,303
                                                          ======         ======         ======
</TABLE>
         (1)   The amounts of preferred dividends and interest expense that
               would have been incurred as a result of the acquisition in fiscal
               year 1996 of 17 restaurants and four licensed locations from
               Benihana of Tokyo, Inc. have been factored in the calculation of
               earnings per share from the beginning of fiscal year 1996.

         Reclassifications  - Certain prior year amounts have been  reclassified
         to conform to the fiscal year 1998 presentation.

2.       ACQUISITION

         The  Company's  consolidated  financial  statements  and related  notes
         include the acquisition of Rudy's Restaurant Group, Inc.  ("Rudy's") as
         of December 1, 1997.  Rudy's owns and  operates  nine  teppanyaki-style
         Japanese   restaurants   in   Florida,   Ohio,   Michigan,   Minnesota,
         Pennsylvania  and  Washington,  D.C. under the names Samurai and Kyoto.
         The  acquisition  price was  approximately  $20  million  inclusive  of
         transaction costs and certain agreements to former employees of Rudy's.
         Additionally,  the  Company  granted a  five-year  warrant to  purchase
         200,000  shares of the  Company's  Class A Common  Stock at an exercise
         price of $8.00 per share to the chief executive officer of Rudy's.  The
         acquisition has been accounted for using the

                                     28

<PAGE>

         purchase method of accounting and the operating  results of Rudy's have
         been  included  in  the  Company's  current  fiscal  year  consolidated
         statement of operations  since the date of  acquisition.  The excess of
         the purchase price over the acquired tangible and intangible net assets
         of approximately $13 million has been allocated to goodwill.

         The following unaudited pro forma financial information gives effect to
         the  acquisition as if the acquisition had occurred as of the beginning
         of the fiscal years  presented.  This pro forma  financial  information
         reflects   certain    adjustments   such   as:   eliminating    certain
         administrative expenses of Rudy's,  amortization of goodwill,  interest
         expense on  additional  bank  borrowings,  and the  related  income tax
         effects (in thousands, except per share information):
<TABLE>
<CAPTION>
                                                          March 29,             March 30,
                                                            1998                  1997
                                                         (Unaudited)           (Unaudited)
                                                         -----------           -----------  
<S>                                                      <C>                   <C>
           Restaurant sales                               $111,153              $100,760
           Net income                                     $  6,742              $  5,582
           Basic earnings per common share                $   1.11              $    .92
           Diluted earnings per common share              $   1.07              $    .86

</TABLE>
         These pro forma results are not necessarily indicative of what actually
         would  have  occurred  if the  acquisition  had  taken  place as of the
         beginning  of the  fiscal  years  presented,  nor do they  reflect  the
         purchase  price  that  might  have  been  negotiated  at these  earlier
         periods.

3.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         The Company has estimated the fair value of financial  instruments that
         are  included as assets and  liabilities  in the  accompanying  balance
         sheets.  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 29,  1998 and
         March 30, 1997 are as follows (in thousands):
<TABLE>
<CAPTION>
                                                               March 29, 1998               March 30, 1997
                                                          -----------------------       ----------------------
                                                          Carrying     Estimated        Carrying     Estimated
                                                            Value      Fair Value         Value      Fair Value
                                                          --------     ----------       --------     ----------
<S>                                                       <C>          <C>              <C>          <C>
         Financial assets
              Cash and cash equivalents                   $ 1,169      $ 1,169          $ 7,043      $ 7,043
              Receivables                                 $   628      $   612          $   861      $   833
              Cash surrender value of officer's
                  life insurance                          $   306      $   306          $   305      $   305

         Financial liabilities
              Bank and other indebtedness                 $16,840      $17,091          $ 6,543      $ 6,791

</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.


                                   29

<PAGE>

         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 29,        March 30,
                                                    1998             1997
                                                  ---------        ---------
<S>                                               <C>              <C>
         Food and beverage                        $ 1,574          $ 1,243
         Supplies                                   2,194            1,905
                                                  -------          -------

                                                  $ 3,768          $ 3,148
                                                  =======          =======

5.   PREPAID EXPENSES
<CAPTION>
         Prepaid expenses consist of (in thousands):

                                                  March 29,        March 30,
                                                    1998             1997
                                                  ---------        ---------
<S>                                               <C>              <C>
         Prepaid insurance                        $   445          $   547
         Prepaid advertising                           62               14
         Other                                        251              276
                                                  -------          -------

                                                  $   758          $   837
                                                  =======          =======

6.   PROPERTY AND EQUIPMENT
<CAPTION>
         Property and equipment consist of (in thousands):

                                                  March 29,        March 30,
                                                    1998             1997
                                                  ---------        ---------
<S>                                               <C>              <C>
         Land                                     $ 5,925          $ 4,824
         Buildings                                 10,224            9,566
         Leasehold improvements                    28,325           22,998
         Restaurant furniture, fixtures,
           and equipment                           16,288           14,075
         Restaurant facilities and equipment
         under capital leases                       7,655            7,655
                                                  -------          -------
                                                   68,417           59,118

         Less accumulated  depreciation and
         amortization (Including accumulated
         amortization of restaurant facilities
         and equipment under capital leases of
         $5,907 and $5,599 in 1998 and 1997,
         respectively)                             36,657           34,059
                                                  -------          -------
                                                   31,760           25,059
         Construction in progress                   1,238              357
                                                  -------          -------
                                                  $32,998          $25,416
                                                  =======          =======

</TABLE>
                                   30

<PAGE>

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

                                                  March 29,        March 30,
                                                    1998             1997
                                                  ---------        ---------
<S>                                               <C>              <C>
         Lease acquisition costs                  $   429          $   490
         Cash surrender value of officer's
           life insurance                             306              305
         Premium on liquor licenses                   923              651
         Deferred financing charges                   386
         Long-term note receivable                    158              196
         Security deposits                            172              162
         Pre-opening expenses                          84               46
         Other                                        177              239
                                                  -------         --------
                                                  $ 2,635         $  2,089
                                                  =======         ========
</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 1998, 1997 and 1996.

         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.

         Deferred financing charges relate to costs associated with a new credit
         facility dated December 1, 1997.  These costs are being  amortized over
         the life of the  facility.  Amortization  expense  totaled  $19,000 for
         fiscal year 1998.

8.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
         Accounts payable and accrued expenses consist of (in thousands):
<CAPTION>
                                                  March 29,       March 30,
                                                    1998            1997
                                                  ---------       ---------
<S>                                               <C>             <C>
         Accounts payable                         $ 3,766         $ 2,351
         Accrued salaries                             917             687
         Accrued property taxes                       449             293
         Accrued percentage rent                      537             296
         Accrued incentive compensation               910             866
         Taxes, other than income taxes             1,289             973
         Other accrued operating expenses           1,455           1,552
                                                  -------         -------
                                                  $ 9,323         $ 7,018
                                                  =======         =======
</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 the  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

                                      31

<PAGE>

         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
         1999                                        $ 3,437         $   894
         2000                                          3,782             893
         2001                                          3,008             893
         2002                                          2,723             893
         2003                                          2,521             784
         Thereafter                                   17,195             768
                                                     -------         -------
         Total minimum lease payments                $32,666           5,125
         Less amount representing interest                             1,354
                                                                     -------
         Total obligations under capital leases                        3,771
         Less current maturities                                         506
                                                                     -------
         Long-term obligations under capitalized
           leases at March 29, 1998                                  $ 3,265
                                                                     =======
<CAPTION>
         Rental expense consists of (in thousands):
                                                       March 29,      March 30,      March 31,
                                                         1998           1997           1996
                                                       ---------      ---------      ---------
<S>                                                    <C>            <C>            <C>
         Minimum rental commitments                    $3,957         $3,310         $3,162
         Rental based on percentage of sales            1,253          1,036            884
                                                       ------         ------         ------

                                                       $5,210         $4,346         $4,046
                                                       ======         ======         ======
<CAPTION>
10.  LONG-TERM DEBT

         Long-term debt consists of (in thousands):
                                                                      March 29,      March 30,
                                                                        1998           1997
                                                                      ---------      ---------
<S>                                                                   <C>            <C>
         Notes payable - bank (see below):
           Term loan                                                  $ 12,000       $  6,104
           Revolving line of credit                                      3,000

         Notes payable - other:
           7 1/2% unsecured promissory note payable
              in monthly installments of $13                               313            439
           7% promissory note payable in monthly
              installments of $30                                          670
            7% unsecured note obligation payable in
              monthly installments of $7                                   210
           Note obligation under terms of non
              competition agreement with former shareholder
              of Rudy's - discounted at 8%, payable in
              monthly installments $17                                     647
                                                                      --------       --------
                                                                        16,840          6,543
         Less current portion                                            1,433            960
                                                                      --------       --------
                                                                      $ 15,407        $ 5,583
                                                                      ========       ========
</TABLE>
         In connection with the acquisition of Rudy's,  the Company entered into
         a new credit  agreement with a bank,  consisting of a $12,000,000  term
         loan and a $15,000,000  revolving  line of credit.  Interest  under the
         credit  agreement  accrues at the Company's option at either prime rate
         plus a margin up to 1.0% or at LIBOR plus a margin of 1.0% to 2.25%. At
         March 29, 1998,  interest was accrued at 7.63%. The applicable interest
         rate margin varies with the Company's leverage ratio

                                       32

<PAGE>

         (defined as EBITDA  divided by funded  indebtedness).  Principal of the
         term loan is  payable at a rate of  $1,000,000  in each of the next two
         years,  $2,000,000 in each of years three and four,  and  $3,000,000 in
         each of years five and six and the revolving  line of credit is payable
         in  2002  and  accordingly,  is  classified  as  long-term  debt on the
         consolidated  balance  sheet,  in each case subject to the terms of the
         credit  agreement.  The credit  agreement  restricts  the Company  from
         making dividend  payments and purchases of the Company's  common equity
         securities  and limits the  amounts  of capital  expenditures  that the
         Company can make annually during the term of the credit agreement.  The
         credit agreement also requires the Company to achieve certain ratios of
         operating cash flow to debt and other financial benchmarks.  The credit
         agreement is collateral-  ized by a security  interest in the Company's
         assets.

         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.

         Principal  maturities of long-term  debt  obligations at March 29, 1998
         are as follows:

         Fiscal year ending
         1999                       $ 1,433
         2000                         1,735
         2001                         2,027
         2002                         5,645
         2003                         2,250
         Thereafter                   3,750
                                    -------
           Total                    $16,840
                                    =======

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.

         The net deferred tax asset balance consists of (in thousands):
<TABLE>
<CAPTION>
                                                        March 29, 1998                                 March 30, 1997
                                            Assets       Liabilities      Total            Assets       Liabilities       Total
                                            -------------------------------------------------------------------------------------
<S>                                         <C>          <C>              <C>              <C>          <C>               <C>
         Excess book amortization for
             for pre-opening costs and
             capital leases                 $   846      $     -          $     846        $   899      $      -          $   899
         Tax loss carryforwards
             principally Rudy's
             Restaurant Group, Inc.           2,891            -              2,891             -              -              -
         Accelerated depreciation for
              tax purposes                     -              (799)           (799)             -            (708)           (708)
         Income tax credits                     940            -               940             963             -              963
         Other                                   10            -                10             333             -              333
         Less - valuation allowance            (107)           -              (107)             -              -              -
                                            -------------------------------------------------------------------------------------

         Total asset (liability)            $ 4,580      $    (799)       $  3,781         $ 2,195      $    (708)        $ 1,487
                                            =====================================================================================
</TABLE>
                                   33

<PAGE>

         The  Company's  net  operating  loss  carryforwards   acquired  in  the
         acquisition of Rudy's total $7,228,000 for ordinary income tax purposes
         and $7,541,000 for alternative minimum income tax purposes available to
         reduce  future  taxable  income.  Certain  of the  net  operating  loss
         carryforwards are subject to certain so-called "SRLY" rules which limit
         their use to offset future  income earned by the entity that  generated
         the loss. All other net operating loss  carryforwards  are available to
         offset  income  of  Rudy's.   Furthermore,   the  net  operating   loss
         carryforwards are subject to the change of control provision of Section
         382 that limits the usage of the net operating  loss  carryforwards  to
         approximately  $1,100,000  per year.  The valuation  allowance has been
         established  to  reserve  for  net  operating  loss  carryforwards  not
         expected to be realized. All net operating loss carryforwards expire as
         follows (in thousands):

         Fiscal year ending
         1999                              $  955
         2000                                 697
         2001                                 196
         2004                                 297
         2005                               4,613
         2006                                 470
                                           ------
                                           $7,228
                                           ======
<TABLE>
         The income tax provision consists of (in thousands):
<CAPTION>
                                                                March 29,         March 30,        March 31,
                                                                  1998              1997             1996
         ----------------------------------------------------------------------------------------------------
<S>                                                             <C>               <C>              <C>
         Current:
            Federal (net of utilization of net operating 
               loss of $352, $0 and $5,488 in fiscal years
               1998, 1997 and 1996, respectively)               $1,254            $1,637           $  320
            State                                                  625               505              369
         Deferred:
            Federal and State                                    1,043                90              676
                                                                ---------------------------------------------

         Income tax provision                                   $2,922            $2,232           $1,365
                                                                =============================================

         The income tax  provision  differed  from the  amount  computed  at the
         statutory rate as follows (in thousands):
<CAPTION>                 

                                                                March 29,         March 30,        March 31,
                                                                  1998              1997             1996
         ----------------------------------------------------------------------------------------------------
<S>                                                             <C>               <C>              <C>
         Federal income tax provision at statutory
         rate of 34%                                            $3,013            $2,441           $1,963
         Change in valuation allowance                             (92)                              (592)
         State income taxes, net of federal benefit                413               333              244
         Tax credits, net                                         (498)             (426)            (288)
         Other                                                      86              (116)              38
                                                                ---------------------------------------------

         Income tax provision                                   $2,922            $2,232           $1,365
                                                                =============================================

         Effective income tax rate                              33.0%             31.1%            23.6%
                                                                =============================================
</TABLE>
12.  STOCKHOLDERS' EQUITY

         Series  A  Convertible  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.  During fiscal year 1998,
         the Company redeemed 1,000 shares of Preferred Stock.

                                      34
<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 ("1994  Plan"),  a 1996 Class A Stock Option
         Plan ("1996 Plan"),  a 1997 Class A Stock Option Plan ("1997 Plan") and
         a  Directors'  Stock  Option Plan  ("Directors'  Plan"),  under which a
         maximum of approximately 1,785,000 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.  Options granted under the 1994 Plan are exercisable on the date
         of  grant.  Options  granted  under  the 1996  Plan  and 1997  Plan are
         exercisable  with  respect to 1/3 of the shares  granted on the date of
         grant, with respect to an additional 1/3 of the shares granted,  on the
         first anniversary of the date granted,  and with respect to the balance
         of the shares  granted on the second  anniversary  of the date granted.
         Under the  Directors'  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.  Options granted under the
         Directors  Plan  are  exercisable  with  respect  to 1/2 of the  shares
         granted on the first  anniversary of the date of grant and with respect
         to the balance of the shares on the second  anniversary  of the date of
         grant.

         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.

         SFAS No.  123  defines  a fair  value  method of  accounting  for stock
         options and similar  equity  instruments.  Under the fair value method,
         compensation cost is measured at the grant date based on the fair value
         of the  award  and is  recognized  over the  service  period,  which is
         usually the vesting period. Companies are encouraged, but not required,
         to adopt the fair value method of accounting  for employee  stock-based
         transactions.  Companies are also  permitted to continue to account for
         such  transactions  under APB No. 25, but are required to disclose in a
         note to the financial  statements pro forma net income and earnings per
         share as if the Company had applied the new method of  accounting.  The
         Company  applies  APB  No.  25  in  accounting  for  its  stock-  based
         compensation plans. Under APB No. 25, because the exercise price of the
         Company's  employee  stock options  approximates  the fair value of the
         underlying  stock on the date of  grant,  no  compensation  expense  is
         recognized.  Had compensation cost been determined on the basis of fair
         value  pursuant to SFAS No. 123,  for options  granted in fiscal  1998,
         1997 and 1996,  net income and  diluted  earnings  per share would have
         been as follows:
<TABLE>
<CAPTION>
                                            March 29,           March 30,         March 31,
                                              1998                1997              1996
                                            ---------           ---------         ---------
<S>                                         <C>                 <C>               <C>
         Net Income
             As reported                    $5,940              $4,947            $4,410
             Pro forma                      $5,372              $4,870            $4,386
         Diluted Earnings Per Share
             As reported                    $.93                $.77              $.70
             Pro forma                      $.84                $.76              $.70

</TABLE>
         The  following  weighted  average  assumptions  were used in the option
         pricing model:  a risk-free  interest rate of 5.7% for fiscal year 1998
         and 6.8% for 1997 and  1996,  respectively;  an  expected  life of four
         years, no expected dividend yield and a volatility factor of 34% to 45%
         for fiscal years 1998, 1997 and 1996, respectively.

                                      35

<PAGE>

         Due to the  inclusion of only fiscal  years 1998,  1997 and 1996 option
         grants, the effects of applying SFAS No. 123 in 1998, 1997 and 1996 may
         not be representative of the pro forma impact in future years.

         The following table  summarizes  information  about  fixed-price  stock
         options outstanding at March 29, 1998:
<TABLE>
<CAPTION>
                                       Options Outstanding                          Options Exercisable
                               ---------------------------------------            --------------------------
                                             Weighted-
                                             Average          Weighted                            Weighted
            Ranges of                       Remaining         Average                             Average
             exercise                      Contractual        Exercise                            Exercise
             Prices            Number         Life             Price              Number           Price
         ---------------------------------------------------------------------------------------------------
         $ 1 3/8 - $3 1/4        32,000       5.8             $ 2.75                32,000         $ 2.75
            6 3/4 -   8 3/8    196,170        8.8               7.70                87,837           7.64
            9 3/16 - 10 1/8    124,757        8.3               9.42                82,755           9.43
          10 1/4 - 12 1/4      316,500        9.5              12.14               110,083          12.04
         ----------------      -------                                             -------
         $ 1 3/8 - $12 1/4     669,427                                             312,675

         Transactions  under the above plans for the three years ended March 29,
         1998 are as follows:
<CAPTION>
                                                              March 29,           March 30,        March 31,
                                                                1998                1997             1996
         ----------------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>              <C>
         Balance, beginning of year                              222,407           129,900          121,100
         Granted                                                 467,750           133,507           31,500
         Canceled                                                 (3,750)
         Expired                                                  (2,067)
         Exercised                                               (14,913)          (41,000)         (22,700)
                                                                ---------------------------------------------

         Balance, end of year                                    669,427           222,407          129,900
                                                                =============================================
         Weighted average fair value of options
             granted during year                                $   4.47          $  3.57          $  3.79

</TABLE>
         On March 29, 1998, options for 312,675 of the shares are exercisable at
         prices ranging from $1 3/8 to $12 1/4.

         There were  approximately  1,362,000 shares of common stock reserved at
         March 29, 1998,  for issuance  upon exercise of stock options under all
         stock option plans.

         Stock  Rights  -  During  fiscal  year  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.

                                   36
<PAGE>

13.  INCENTIVE AND DEFERRED COMPENSATION PLANS

         The Company has a 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  improve  the  long-term
         sustainable results of operations of the Company by more fully aligning
         the interests of management and key employees with the  shareholders of
         the Company.  One-third  of the amounts  awarded are  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  or  deferred  in  a  non-qualified   deferred
         compensation plan. The target rate, which for 1998 and 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
         $475,000 and $450,000 for fiscal years 1998 and 1997, respectively.

         The  Company  has an  executive  retirement  plan  whereby  certain key
         employees  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)

         Quarter ended (in thousands except for per share information)
<TABLE>
<CAPTION>
                                                                    March 29, 1998
         -------------------------------------------------------------------------------------------------
                                               4th              3rd               2nd              1st
<S>                                            <C>              <C>               <C>              <C>
         REVENUES                              $26,880          $24,096           $21,192          $27,589
         GROSS PROFIT                           19,836           17,743            15,725           20,559
         NET INCOME                              1,598            1,562             1,140            1,640
         BASIC EARNINGS
             PER SHARE (1) :                   $   .26          $   .25           $   .18          $   .26
         DILUTED EARNINGS
             PER SHARE (1) :                   $   .25          $   .24           $   .18        $     .26

         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
         BASIC EARNINGS
             PER SHARE (1) :                   $    .23         $    .23          $    .14         $    .22
         DILUTED EARNINGS
             PER SHARE (1) :                   $    .22         $    .22          $    .13         $    .20

</TABLE>
         (1)   Amounts have been restated, see Note 1.

                                    37

<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 29, 1998 and March 30, 1997, and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three  years in the period  ended  March 29,  1998.  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 29, 1998 and March 30, 1997,  and the results of their  operations  and
their cash flows for each of the three years in the period  ended March 29, 1998
in conformity with generally accepted accounting principles.





Deloitte & Touche LLP
Certified Public Accountants
Miami, Florida
May 8, 1998

                                   38

<PAGE>

COMMON STOCK INFORMATION

The Company's  Common Stock and Class A Stock are traded on the Nasdaq  National
Market System.  There were 304 holders of record of the Company's  Common Stock
and 408 holders of record of the Class A Common Stock at March 29, 1998.

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 29, 1998                 March 30, 1997
                                            ------------------------       ----------------------
                  COMMON STOCK              High            Low            High           Low
<S>                                         <C>             <C>            <C>            <C>
                  1st Quarter               9  3/4          6  3/4         16 1/4         10 1/4
                  2nd Quarter               13              8  7/8         14 1/8         10
                  3rd Quarter               15              11 3/8         14             10 7/8
                  4th Quarter               12 3/4          11             12             7

<CAPTION>
                                                            Fiscal Year Ended
                                                            ----------------- 
                                               March 29, 1998                 March 30, 1997
                                            ----------------------         ----------------------
                  CLASS A
                  COMMON STOCK              High            Low            High           Low
<S>                                         <C>             <C>            <C>            <C>
                  1st Quarter               8  5/8          6  1/2         10             8   3/8
                  2nd Quarter               12 3/8          8  1/8         9  3/8         7   3/4
                  3rd Quarter               13              11             9  3/16        7   1/2
                  4th Quarter               12 1/8          10 1/2         8  3/4         6   5/8

</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  stockholders  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.

                                  39

<PAGE>


Exhibit 10.14

                  AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         Amendment No. 1 dated December 11, 1997 to Employment Agreement dated
May 15, 1995 (the "Agreement") by and between Benihana Inc. and Rocky H. Aoki.

         Unless  otherwise  defined  herein,  capitalized  terms  shall have the
respective  meanings  assigned to them in the Agreement.  Effective  December 1,
1997, the parties agree that the Agreement shall be amended as follows:

         1.  Section 1.1 of the Agreement is revised by modifying the first
sentence of that section to read in its entirety, as follows:

             1.1 Subject to the terms and provisions of this Agreement, the
         Company  will  continue to employ the  Employee in its business and the
         Employee will continue to work for the Company as Chairman of the Board
         of Directors (being the Chief Executive  Officer of the Company) for an
         extended term continuing until December 31, 2002.


         2.  Section 4.1 of the Agreement is revised to read as follows:

             4.1 In respect of services  to be  performed  by the  Employee
         during the Employment Period, the Company agrees to pay the Employee an
         annual  salary of Five  Hundred  Thousand  Dollars  ($500,000)  ("Basic
         Compensation"),  payable in  accordance  with the  Company's  customary
         payroll practices for executive employees.


         3.  Subsection 4.4 (ii) of the Agreement is revised to read as follows:

             4.4  ...(ii)  the  exercise  price  of such  option;  provided
         however,  that in no fiscal  year of the  Company  shall the  aggregate
         purchase  price of such  options  exceed five percent (5%) of the total
         stockholders  equity (net worth) of the Company as shown on its audited
         financial statements for the fiscal year immediately preceding the year
         in which such right is exercised...


         4.  Sections 8.1 and 8.2 of the Agreement are revised to read, as
             follows:

             8.1 In the  event at any time  after  the  Effective  Date,  a
         majority of the Board of  Directors  is composed of persons who are not
         "Continuing Directors",  as hereinafter defined, which event is defined
         to mean a "Change in Control",  Employee  shall have the option,  to be
         exercised by written  notice to the  Company,  to resign as an employee
         and terminate  this  Agreement,  effective as of such date specified in
         the notice of exercise and immediately upon such termination to receive
         payment of a sum equal to the product of (A) the Basic  Compensation in
         effect on the date of such termination  multiplied (B) by the number of
         years  (both full and  partial)  remaining  in the term hereof had such
         termination  not occurred.  The payment to be made upon the exercise of
         the option by the Employee in  accordance  with the  provisions  of the
         preceding sentence is defined as the "Severance Payment". The Severance
         Payment shall be made to Employee not later than twenty (20) days after
         the date  designated by the Employee as the date upon which  Employee's
         resignation  as an employee and  termination of his Employment is to be
         effective.  The Severance Payment shall constitute  liquidated  damages
         and  not a  penalty,  and  Employee  shall  not be  obligated  to  seek
         employment  to mitigate his  damages;  nor shall any  compensation  the
         Employee  receives from any party  subsequent to such termination be an
         offset to the amount of the Severance Payment.

             8.2 "Continuing Directors" shall mean (i) the directors of the
         Company  on  January  1,  1998  and  (ii)  any  person  who  was  or is
         recommended  to (A)  succeed  a  Continuing  Director  or (B)  become a
         director as a result of an  increase in the size of the Board,  in each
         case, by a majority of the Continuing Directors then on the Board.

                                40

<PAGE>

         Except as  modified  herein,  the  Agreement  remains in full force and
effect in accordance with its terms without revocation or change.

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment No. 1
as of the date and year first above written.

                                         BENIHANA INC.


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



                                             /s/ Rocky H. Aoki
                                            ---------------------------
                                             Rocky H. Aoki

                                41

<PAGE>


Exhibit 10.15

                    AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

         Amendment No. 2 dated May 18 , 1998 to Employment Agreement dated
May 15, 1995 by and between Benihana Inc. and Rocky H. Aoki, as amended by
Amendment No. 1 thereto dated December 11, 1997 (as so amended, the
"Agreement").

         Unless  otherwise  defined  herein,  capitalized  terms  shall have the
respective  meanings  assigned to them in the  Agreement.  Effective on the date
hereof, the parties agree that the Agreement shall be amended as follows:

         1.  Section 1.1 of the Agreement is hereby amended to read in its
             entirety as follows:

             1.1      Subject to the terms and provisions of this Agreement, the
         Company will continue to employ the Employee in its  business and the
         Employee  will continue to work for the Company as a consultant for an
         extended  term continuing until December 31, 2002. "Employment Period"
         shall mean the term hereof.  Such  employment  may be terminated by the
         Company at any time for  "cause",  which  shall be  limited to the
         Employee's  proven dishonesty  with respect to the Company, disloyalty
         or the  continuing breach of any of the covenants on the Employee's 
         part herein set forth or as a result of the  Employee's  gross
         negligence  or willful act of omission.

         2.  Section 2 of the Agreement is hereby amended to read as in its
             entirety as follows:

         2.   DUTIES

             During the Employment  Period, the Employee shall perform such
         duties  as a  consultant  as may  be,  from  time to  time,  reasonably
         delegated  or assigned to him by the Board of  Directors of the Company
         consistent with the Employee's abilities.

         3.  Section 8.1 of the Agreement is hereby amended to read in its
             entirety as follows:

             8.1      In the event at any time after the Effective Date, a
         majority of the Board of Directors is composed of persons who are not
         "Continuing Directors", as hereinafter  defined,  which  event is
         defined  to mean a  "Change  in Control",  Employee  shall have the
         option, to be  exercised by written  notice to the Company,  to resign 
         as a consultant and terminate this Agreement, effective as of such date
         specified  in  the  notice  of  exercise  and  immediately  upon  such
         termination  to receive  payment of a sum equal to the  product of (A)
         the  Basic  Compensation  in  effect  on the date of such  termination
         multiplied  (B) by  the  number  of  years  (both  full  and  partial)
         remaining in the term hereof had such  termination  not occurred.  The
         payment to be made upon the  exercise of the option by the Employee in
         accordance with the provisions of the preceding sentence is defined as
         the  "Severance  Payment".  The  Severance  Payment  shall  be made to
         Employee not later than twenty (20) days after the date  designated by
         the  Employee  as the date  upon  which  Employee's  resignation  as a
         consultant and  termination of his Employment is to be effective.  The
         Severance  Payment  shall  constitute  liquidated  damages  and  not a
         penalty,  and Employee  shall not be obligated to seek  employment  to
         mitigate his damages; nor shall any compensation the Employee receives
         from any  party  subsequent  to such  termination  be an offset to the
         amount of the  Severance  Payment.  Except  as  modified  herein,  the
         Agreement  remains  in full force and  effect in  accordance  with its
         terms without revocation or change.

                                   42
<PAGE>

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment No. 2
as of the date and year first above written.

                                       BENIHANA INC.


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


                                           /s/ Rocky H. Aoki
                                           ----------------------------
                                           Rocky H. Aoki

                                   43

<PAGE>


Exhibit 10.16

                    AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         Amendment No. 1 dated December 11, 1997 to Employment Agreement dated
May 15, 1995 (the "Agreement") by and between Benihana Inc. and Joel A.Schwartz.

         Unless  otherwise  defined  herein,  capitalized  terms  shall have the
respective  meanings  assigned to them in the  Agreement.  Effective  January 1,
1998, the parties agree that the Agreement shall be amended as follows:

         1.  Section 1.1 of the Agreement is revised by modifying the first
sentence of that section to read in its entirety, as follows:

                  1.1 Subject to the terms and provisions of this Agreement, the
         Company  will  continue to employ the  Employee in its business and the
         Employee  will  continue to work for the Company as President and Chief
         Operating  Officer for an extended term  continuing  until December 31,
         2002.

         2.  Section 4.1 of the Agreement is revised to read as follows:

                  4.1 In respect of services  to be  performed  by the  Employee
         during the Employment Period, the Company agrees to pay the Employee an
         annual salary of Two Hundred  Fifty-Five  Thousand  Dollars  ($255,000)
         ("Basic  Compensation"),  payable  in  accordance  with  the  Company's
         customary payroll practices for executive employees.

         3.  The Agreement is revised by adding the following as Section 4.4:

                  4.4 If during the term  hereof  Employee  owns any  options to
         purchase securities of the Company which securities are publicly traded
         and which options were granted to him in connection with his service as
         an  employee,  officer or director of the Company,  the Employee  shall
         have the right at any time after a "Change in  Control",  as defined in
         Section 17.1 to cause the Company to  repurchase  such options from him
         at a purchase  price  equal to the  difference  between (i) the closing
         price of the appropriate  security of the Company (if traded on the New
         York or  American  Stock  Exchange  or  quoted in the  NASDAQ  National
         Market) or the average  between  the  closing bid and asked  prices (if
         traded on the over-the-counter market) on the date immediately prior to
         the date on which  Employee  exercises such right and (ii) the exercise
         price of such option;  provided however,  that in no fiscal year of the
         Company shall the aggregate  purchase price of such options exceed five
         percent  (5%) of the  total  stockholders  equity  (net  worth)  of the
         Company as shown on its  audited  financial  statements  for the fiscal
         year  immediately  preceding the year in which such right is exercised.
         Such right shall be  exercised by Employee  giving the Company  written
         notice thereof and the purchase and sale shall be consummated  not more
         than ten (10)  business days after receipt by the Company of the notice
         of exercise.

         4.      The Agreement is revised by adding the following as Section 17:

                 17.      Change In Control.

                           17.1.  In the event at any time  after the  Effective
         Date,  a majority of the Board of  Directors is composed of persons who
         are not "Continuing Directors",  as hereinafter defined, which event is
         defined to mean a "Change in Control",  Employee shall have the option,
         to be  exercised  by  written  notice to the  Company,  to resign as an
         employee  and  terminate  this  Agreement,  effective  as of such  date
         specified  in  the  notice  of  exercise  and  immediately   upon  such
         termination to receive payment of a sum equal to the product of (A) the
         Basic Compensation in effect on the date of such termination multiplied
         (B) by the number of years  (both full and  partial)  remaining  in the
         term hereof had such  termination not occurred.  The payment to be made
         upon the exercise of the option by the Employee in accordance  with the
         provisions  of the  preceding  sentence  is defined  as the  "Severance
         Payment".  The  Severance  Payment  shall be made to Employee not later
         than twenty (20) days after the date  designated by the Employee as the
         date upon which  Employee's  resignation as an employee and termination
         of his Employment is to be

                                    44

<PAGE>

         effective.  The Severance Payment shall constitute  liquidated  damages
         and  not a  penalty,  and  Employee  shall  not be  obligated  to  seek
         employment  to mitigate his  damages;  nor shall any  compensation  the
         Employee  receives from any party  subsequent to such termination be an
         offset to the amount of the Severance Payment.

                           17.2  "Continuing   Directors"  shall  mean  (i)  the
         directors  of the  Company at the close of business on January 1, 1998,
         and  (ii)  any  person  who  was or is  recommended  to (A)  succeed  a
         Continuing Director or (B) become a director as a result of an increase
         in the size of the Board, in each case, by a majority of the Continuing
         Directors then on the Board.

         5.  The Agreement is revised by adding the following as Section 18:

                  18.      Termination of Employment Without Cause.  Upon any
         termination of the Employee's  employment  without cause, the Employee
         shall be  entitled  to  receive  an amount  computed  in the same
         manner as the Severance  Payment not later than 20 days after any
         such  termination.   This  payment  shall  constitute  liquidated
         damages and not a penalty, and Employee shall not be obligated to
         seek   employment   to  mitigate  his  damages;   nor  shall  any
         compensation  the Employee  receives from any party subsequent to
         such  termination  be an  offset to the  amount of such  payment.

         Except as modified  herein,  the Agreement  remains in full force
and effect in accordance with its terms without revocation or change.

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment No. 1
as of the date and year first above written.

                                          BENIHANA INC.



                                          By:  /s/ Rocky H. Aoki
                                               --------------------------
                                               Rocky H. Aoki,
                                               Chairman of the Board


                                               /s/ Joel A. Schwartz
                                               --------------------------
                                               Joel A. Schwartz

                                45

<PAGE>

Exhibit 10.17

                   AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         Amendment No. 1 dated December 11, 1997 to Employment Agreement dated
April 1, 1995 (the "Agreement") by and between Benihana Inc. and Taka Yoshimoto.

         Unless  otherwise  defined  herein,  capitalized  terms  shall have the
respective  meanings  assigned to them in the  Agreement.  Effective  January 1,
1998, the parties agree that the Agreement shall be amended as follows:

         1.  Section 1 the Agreement is revised to read in its entirety, as
follows:

                  1.       Subject to the terms and provisions of this
         Agreement, the Company will continue to employ the Employee for an
         extended term  continuing  until December 31, 2000 (the "Employment
         Period").

         2.  Section 3.1 of the Agreement is revised to read as follows:

                  3.1 In respect of services  to be  performed  by the  Employee
         during the Employment Period, the Company agrees to pay the Employee an
         annual salary of One Hundred Forty Thousand Dollars  ($140,000) ("Basic
         Compensation"),  payable in  accordance  with the  Company's  customary
         payroll practices for executive employees.

         3.  Section  5.1 is amended by  eliminating  the words "the  Company.",
which appear in the second line of the second paragraph of such Section.

         Except as  modified  herein,  the  Agreement  remains in full force and
effect in accordance with its terms without revocation or change.

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment No. 1
as of the date and year first above written.

                                      BENIHANA INC.



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


                                           ----------------------------
                                           /s/ Taka Yoshimoto
                                           Taka Yoshimoto

                                 46

<PAGE>

Exhibit 10.18

                    AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         Amendment No. 1 dated December 11, 1997 to Employment Agreement dated
January 1, 1995 (the "Agreement") by and between Benihana Inc. and Michael
Burris.

         Unless  otherwise  defined  herein,  capitalized  terms  shall have the
respective  meanings  assigned to them in the  Agreement.  Effective  January 1,
1998, the parties agree that the Agreement shall be amended as follows:

         1.  Section 1 the Agreement is revised to read in its entirety, as
follows:

                  1.       Subject to the terms and provisions of this
         Agreement, the Company will continue to employ the Employee for an
         extended term  continuing  until December 31, 2000 (the "Employment
         Period").

         2.  Section 3.1 of the Agreement is revised to read as follows:

                  3.1 In respect of services  to be  performed  by the  Employee
         during the Employment Period, the Company agrees to pay the Employee an
         annual salary of One Hundred Thirty-Seven Thousand Five Hundred Dollars
         ($137,500)  ("Basic  Compensation"),  payable  in  accordance  with the
         Company's customary payroll practices for executive employees.

         3.  Sections 3.3 and 3.5 are eliminated.

         4.  Section 5.1 is amended by  eliminating  the words,  "the  Company,"
which appear in the second line of the second paragraph of such Section.

         Except as  modified  herein,  the  Agreement  remains in full force and
effect in accordance with its terms without revocation or change.

         IN WITNESS WHEREOF,  the undersigned have executed this Amendment No. 1
as of the date and year first above written.

                                        BENIHANA INC.



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


                                             /s/ Michael Burris
                                             -----------------------------
                                             Michael Burris

                                 47

<PAGE>



EXHIBIT 23.01



INDEPENDENT AUDITOR'S CONSENT


We consent to the incorporation by reference in this  Registration  Statement of
Benihana  Inc.  on Form S-3 of our  report  dated May 8, 1998  appearing  in the
Annual  Report on Form 10-K of Benihana  Inc. for the year ended March 29, 1998,
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
June 22, 1998



                                    48

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EXHIBIT 23.02



INDEPENDENT AUDITOR'S CONSENT


We consent to the incorporation by reference in this  Registration  Statement of
Benihana  Inc.  on Form S-8 of our  report  dated May 8, 1998  appearing  in the
Annual Report on Form 10-K of Benihana Inc. for the year ended March 29, 1998.





Deloitte & Touche LLP
Miami, Florida
June 22, 1998


                                    49

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