UNITED
      STATESSECURITIES
      AND EXCHANGE COMMISSIONWASHINGTON,
      D.C. 20549FORM
      10-K




x ANNUAL REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934For
      the Fiscal Year Ended March 29, 2009or,o TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934Commission
      File No. 0-26396




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




Delaware
            
            65-0538630(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      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:NoneSecurities
      registered pursuant to Section 12(g) of the
Act:




Title
      of Each Class
                
                
                Name
      of Exchange on Which RegisteredCommon
      Stock, par value $.10 per share
                NASDAQ
      Global Select MarketClass
      A Common Stock, par value $.10 per share
                NASDAQ
      Global Select MarketPreferred
      Share Purchase Right
                Not
      Applicable




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes o          No
x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


Yes o          No
x




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 (or such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing requirements for the
past 90 days.


Yes x          No
o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulations S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).


Yes o          No
o




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. o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated
      filer o
              Accelerated filer
      o
              Non-accelerated
      filer o
              Smaller reporting
      company x(do not check if
      smaller reporting company)


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).


Yes o          No
x




As of May
29, 2009, 5,629,014 shares of common stock and 9,745,261 shares of Class A
common stock were outstanding. As of October 10, 2008, the aggregate market
value of common equity held by non-affiliates was approximately $40,002,000
based on the closing price of the common stock and Class A common stock on such
date.




DOCUMENTS INCORPORATED BY
REFERENCE




Portions
of the registrant’s Annual Report to Stockholders for the year ended March 29,
2009 are incorporated by reference in Parts I and II.




Portions
of the registrant’s proxy statement for the 2009 Annual Meeting are incorporated
by reference in Parts III.







BENIHANA
INC. AND SUBSIDIARIES




INDEX
TO FORM 10-K




PAGEPART
      IItem 1.
            Business
            
            
            1Item 1A.
            Risk Factors
            
            
            6Item 1B.
            Unresolved Staff Comments
            
            
            10Item 2.
            Properties
            
            
            10Item 3.
            Legal Proceedings
            
            
            11Item 4.
            Submission of Matters to a Vote of Security
      Holders
            
            
            12PART
      IIItem 5.
            Market for the Registrant’s Common Equity, Related
      Stockholder Matters and Issuer Purchases of Equity
      Securities
            
            
            12Item 6.
            Selected Financial Data
            
            
            12Item 7.
            Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
            
            
            12Item 7A.
            Quantitative and Qualitative Disclosures About Market
      Risks
            
            
            12Item 8.
            Financial Statements and Supplementary
    Data
            
            
            12Item 9.
            Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure
            
            
            12Item 9A.
            Controls and Procedures
            
            
            13Item 9B.
            Other Information
            
            
            13PART
      IIIItem 10.
            Directors, Executive Officers and Corporate
      Governance
            
            
            14Item 11.
            Executive Compensation
            
            
            14Item 12.
            Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters
            
            
            14Item 13.
            Certain Relationships and Related Transactions and Director
      Independence
            
            
            14Item 14.
            Principal Accountant Fees and Services
            
            
            14PART
      IVItem 15.
            Exhibits and Financial Statement
    Schedules
            
            
            15Signatures
            
            
            
            18







PART
I




Item 1.
                Business




General




Benihana
Inc. (“we,” “our” or “us”) and its predecessor companies have operated
“Benihana” teppanyaki-style Japanese restaurants in the United States for 45
years, and we believe we are one of the largest operators of teppanyaki-style
restaurants in the country. We also operate two other Asian restaurant concepts:
RA Sushi and Haru. Benihana Inc. is a Delaware corporation incorporated in
December 1994.




Our core
concept, the Benihana restaurant, offers teppanyaki-style Japanese cuisine in
which fresh steak, chicken and seafood are prepared by a chef on a steel teppan
grill at the center of the customers’ table. Our RA Sushi concept offers sushi
and a full menu of Pacific-Rim dishes in a high-energy environment featuring
upbeat design elements and contemporary music. Our Haru concept offers an
extensive menu of traditional Japanese and Japanese fusion dishes in a modern,
urban atmosphere as well as take-out and delivery services. We sold our sole
Sushi Doraku restaurant in fiscal year 2007.




As of
June 29, 2009, we:


●
              own
      and operate 65 Benihana restaurants, including one restaurant under the
      name Samurai;●
              franchise
      22 additional Benihana restaurants;●
              own
      and operate 23 RA Sushi restaurants; and●
              own
      and operate 9 Haru
restaurants.




Our
principal executive offices are located at 8685 Northwest 53rd
Terrace, Miami, Florida 33166 (telephone number 305-593-0770), and our corporate
website address is http://www.benihana.com.
We make our electronic filings with the Securities and Exchange Commission
(“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to these reports, if any, available
on the corporate website free of charge as soon as practicable after filing with
or furnishing to the SEC. These reports are also available at www.sec.gov.




We have a
52/53-week fiscal year. Our fiscal year ends on the Sunday within the dates of
March 26 through April 1. Fiscal years 2009 and 2008 consisted of 52 weeks,
while fiscal year 2007 consisted of 53 weeks. Our business is not highly
seasonal although we do have more diners coming to our restaurants for special
holidays such as Mother’s Day, Valentine’s Day and New Year’s Eve. Mother’s Day
falls in our first fiscal quarter, New Year’s Eve in the third fiscal quarter
and Valentine’s Day in the fourth fiscal quarter of each year.




Sales by
our company owned restaurants were $303.9 million for the fiscal year ended
March 29, 2009, as compared to $295.2 million for the prior fiscal year. Our net
loss for the fiscal year ended March 29, 2009 was $5.1 million, as compared to
net income of $12.8 million for the prior fiscal year.




For
information concerning our financial condition, results of operations and
related financial data, including selected data for our operating segments,
refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and Item 8 “Financial Statements and Supplementary Data”
of this Form 10-K.




Strategy




The
critical elements of our growth strategy are as follows:




Selectively Pursue Restaurant
Growth.We believe that each of our three concepts has broad appeal and,
as a result, we have significant opportunities to selectively expand our
business. However, in light of the current challenges facing the United States
economy as a whole, we have opted to reduce capital expenditures and expect to
limit near term expansion to those development projects for which leases have
already been executed. We anticipate that as the economy improves, we will again
seek to capitalize on our broad customer appeal and strong brand recognition
within the casual dining segment by opening new restaurants and selectively
acquiring existing Asian-theme restaurants in major U.S. markets.




Design Initiative.We have
developed a prototype Benihana restaurant to improve the unit-level economics
while shortening construction time and improving decor, which is used to design
and construct new Benihana restaurants. The prototype design reflects the
cutting edge of contemporary dining and entertainment and places the customer at
the center of the Benihana experience through the visual impact of the exterior,
a vibrant waiting area and a more dramatic stage for our legendary Benihana
chefs. While the prototype design standardizes the look and feel, as well as the
operational efficiency, of the Benihana restaurant operations, it does provide
certain flexibility to accommodate specific market conditions. We have built
nine locations using the prototype design, which was first implemented in fiscal
year 2007. Elements of the prototype design have also been incorporated into
certain existing Benihana restaurants as part of our renovation
program.




Maintain Strong Restaurant Unit
Economics.Our experienced management team intends to maintain and
improve, where necessary, attractive restaurant profit margins through sustained
sales growth and effective cost controls.


1




Continue To Build Brand Awareness
And Customer Loyalty.We will continue to provide marketing and
promotional support to sustain and grow our reputation for distinctive value,
quality food and customer satisfaction.




Provide Strong Management Support.Our senior management team is experienced in developing and operating
distinctive, high-volume casual dining establishments.




The
Benihana Concept




The
Benihana concept offers casual dining in a distinctive Japanese atmosphere
enhanced by the unique entertainment provided by our highly-skilled Benihana
chefs who prepare fresh steak, chicken and seafood on a teppan grill, in
traditional Japanese style, at the center of the customers’ table. Each of our
teppanyaki-style (“teppan”) tables generally seats eight customers, and the chef
is assisted in the meal service by a waitress or waiter who takes beverage and
food orders. A typical Benihana restaurant has 18 teppan tables and seats
approximately 145 customers in the dining rooms and approximately 40 customers
in the bar, lounge and sushi bar areas.




Most of
our Benihana restaurants are open for both lunch and dinner and offer a full
course meal generally consisting of an appetizer, soup, salad, tea, rice,
vegetables, an entrée of steak, seafood or chicken (or any combination thereof)
and a dessert. A dinnertime meal takes approximately one hour and thirty
minutes. Sushi is offered at all of our Benihana restaurants at either separate
sushi bars, lounges or at the teppan tables. The servings prepared at the teppan
tables are portion controlled to provide consistency in quantities served to
each customer. Alcoholic and non-alcoholic beverages, including specialty mixed
drinks, wine, beer and soft drinks are available. Beverage sales in both the
lounges and dining rooms account for approximately 17% of total sales. The
average comparable check size per person was $28.39 in fiscal year
2009.




As of
June 29, 2009, we operate 65 Benihana restaurants. During fiscal year 2009, we
opened four new Benihana restaurants in Plano, TX, Plymouth Meeting, PA, Coral
Springs, FL and Columbus, OH. Additionally, during fiscal year 2009, the
Memphis, TN location, which had been destroyed by fire in fiscal year 2008, was
rebuilt and re-opened. We are also currently developing an additional Benihana
restaurant to be located in East Rutherford (Meadowlands), NJ.




The
RA Sushi Concept




The RA
Sushi concept offers sushi and a full menu of Pacific-Rim dishes in a
fun-filled, high-energy environment. RA Sushi caters to a younger demographic,
and we believe that it is highly suitable for a variety of real estate options,
including “life-style” centers, shopping centers and malls, as well as areas
with a nightlife component. A typical RA Sushi restaurant seats approximately
200 customers in the bar and sushi areas, including outdoor seating. Beverage
sales in both the lounges and dining rooms account for approximately 34% of RA
Sushi’s total sales, and the average comparable check size per person was $21.05
for fiscal year 2009.




RA Sushi
is our fastest growing concept. Having opened four new RA Sushi restaurants
during fiscal year 2009 as well as one in fiscal year 2010 to date, we operate
23 RA Sushi restaurants as of June 29, 2009. We are focused on the continued
expansion of this concept and have signed leases for and are currently
developing another three RA Sushi restaurants to be located in Orlando, FL,
Leawood, KS and Houston, TX.




The
Haru Concept




The Haru
concept offers an extensive menu of traditional Japanese and Japanese fusion
dishes in a modern, urban atmosphere. In addition to traditional, high quality
sushi and sashimi creations, Haru offers raw bar items and Japanese cuisine,
including crab dumplings, shrimp tempura and chicken teriyaki. Haru also offers
delivery and take-out services, which represent approximately 35% of total sales
at our New York, NY locations. The average comparable check size per person was
$31.65 in fiscal year 2009.




As of
June 29, 2009 we operate 9 Haru restaurants, including seven in New York, NY,
one in Boston, MA and one in Philadelphia, PA. While there are no additional
restaurants currently under development, we continue to evaluate future Haru
locations that meet our development guidelines.




Restaurant
Operations




Our
Benihana restaurants are under the direction of our Executive Vice
President-Restaurant Operations and are divided among ten geographic regions,
each managed by a regional manager. Food preparation for all Benihana
restaurants is supervised by eight regional chefs. Our Haru restaurants are
managed out of New York, NY under the direction of Haru’s Vice President of
Operations, and our RA Sushi restaurants are managed out of Phoenix, AZ under
the direction of RA Sushi’s Vice President of Operations.




Each
restaurant has a manager and one or more assistant managers responsible for the
operation of the restaurant, including personnel matters, local inventory
purchasing and maintenance of quality control standards, cleanliness and
service. Strict guidelines, as documented in our restaurant operations manuals,
are followed to assure consistently high quality customer service and food
quality at each location. Specifications are used for quality and quantity of
ingredients, food preparation, maintenance of premises and employee conduct and
are incorporated in manuals used by the managers, assistant managers and head
chefs. Food and portion sizes are regularly and systematically tested for
quality and compliance with our standards.


2




Our
Benihana restaurant chefs are trained in the teppanyaki style of cooking, sushi
preparation and in customer service with training programs lasting from 8 to 12
weeks. The sushi chefs’ training program for our RA Sushi and Haru restaurants
lasts up to 24 weeks. A portion of the training is spent working in a restaurant
under the direct supervision of an experienced head chef. The program includes
training in our method of restaurant operations and in both tableside and
kitchen food preparation. 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 each
restaurant. 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 listings.




We have
entered into non-cancellable supply agreements for the purchase of certain beef
and seafood items, in the normal course of business, at fixed prices for up to
twelve-month terms. These supply agreements are intended to eliminate volatility
in the cost of the commodities over the terms of the agreements. Substantially
all commodities are distributed to our Benihana restaurants by a national food
service logistics company. Most of the other food products are purchased locally
by the individual restaurant managers and senior chefs. Substantially all of our
restaurant operating supplies are purchased centrally and distributed to the
restaurants from our warehouse or a bonded warehouse.




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




Trade
Names and Service Marks




Benihana
is a Japanese word meaning “red flower.” In the United States and certain
foreign countries, we own the “Benihana” and “Benihana of Tokyo” brand names and
related trademarks and “red flower” symbol, which we believe to be of material
importance to our business and are registered in the United States Patent and
Trademark Office. We also own the United States trademarks and worldwide
development rights to the names “Haru” and “RA” and related
trademarks.




Benihana
of Tokyo, Inc., a privately held company and our largest stockholder and
originator of the Benihana concept, continues to own the rights to the Benihana
name and trademarks outside of the United States, Central and South America and
the islands of the Caribbean. Benihana of Tokyo, Inc. is also the operator of a
Benihana restaurant in Honolulu, Hawaii under an exclusive, royalty-free
franchise from us. We have no financial interest in any restaurant operated or
franchised by Benihana of Tokyo, Inc.




Marketing




We
utilize the internet, television, radio, billboard and print media to promote
our restaurants, strengthen our brand identity and maintain high brand name
recognition. Advertising programs are tailored to each local market. The
Benihana restaurants’ advertising and other marketing are designed to emphasize
the inherently fresh aspects of a Benihana meal and the entertainment value of
the chef cooking at the customers’ table. The entertainment component of the
Benihana method of food preparation and service is emphasized to distinguish
Benihana from other restaurant concepts. RA Sushi’s advertising campaigns are
geared to young affluent demographics via radio and print media, while Haru
focuses on local publications. We also utilize local, “grassroots” marketing
techniques at all three concepts to increase brand awareness and drive
traffic.




Franchising




We have,
from time to time, franchised Benihana restaurants to operators in markets in
which we consider expansion to be of benefit to the Benihana system. We
selectively pursue franchising opportunities, particularly in Central and South
America and the islands of the Caribbean, where we own the rights to the
Benihana trademarks and system. As of June 29, 2009, we have 22 franchised
locations including 13 in the United States and 9 in international
markets.




Franchisees
bear all direct costs involved in the development, construction and operation of
their restaurants. We provide franchisee 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 operating standards and specifications, including menu offerings, food
quality and preparation. In general, franchise agreements currently provide for
an initial payment to us with respect to each new restaurant opened by a
franchisee and continuing royalty payments to us based upon a percentage of a
franchisee’s gross sales throughout the term of the franchise. To comply with
the terms of the franchise agreements, we are prohibited from opening additional
restaurants within certain areas in which our existing franchisees have the
exclusive right to open additional restaurants and operate their existing
Benihana restaurants.




Working
Capital




Since
restaurant businesses do not have large amounts of inventory and accounts
receivable, there is generally no need to finance these items. As a result, many
restaurant businesses, including our own, operate with negative working
capital.


3




New
Restaurant Site Selection and Development




We
believe the locations of our restaurants are critical to our long-term success
and, accordingly, we devote significant time and resources to analyzing each
prospective site. Each of our three concepts requires a different real estate
formula for successful execution. The Benihana concept is successful in
free-standing or in-line locations. The prototype Benihana restaurant was
designed to accommodate approximately 7,000 square feet and allows for
flexibility in layout and number of tables. The RA Sushi concept is successful
in urban or suburban shopping malls, retail strip centers and entertainment
“life-style” centers and typically requires 4,500 to 5,500 square feet plus
patio seating. The Haru concept is successful in densely populated urban markets
and space requirements are somewhat flexible. In general, we currently prefer to
open our restaurants in high profile sites within larger metropolitan areas with
dense populations and above-average household incomes. The layout of each
restaurant is customized to accommodate different types of buildings and
different square footage within the available space. In addition to analyzing
demographic information for each prospective site, we consider other factors
such as visibility, traffic patterns and general accessibility, the availability
of suitable parking and the proximity of residences and shopping
areas.




Our
restaurant development model for each of our active concepts typically calls for
us to occupy leased space in shopping malls, office complexes, strip centers,
entertainment centers and other real estate developments (the “retail lease”
development model) in larger metropolitan areas. We have also acquired the land
when it is economically justified. While we expect the retail lease development
model to continue as our principal approach for opening new restaurants, we also
expect to open more freestanding Benihana restaurants. We generally lease our
restaurant locations for primary periods of 10 to 20 years and have renewal
options for varying lengths of time. Our rent structures vary from lease to
lease, but generally provide for the payment of both minimum base rent and
contingent rent, such as percentage rent based on restaurant sales and rent
increases based on changes in the consumer price index. We are also responsible
for our proportionate share of common area maintenance (“CAM”), insurance,
property tax and other occupancy-related expenses under our leases. Many of our
leases provide for maximum allowable annual percentage or fixed dollar increases
for CAM and insurance expenses to enable us to better predict and control future
variable lease costs. We expend cash for leasehold improvements and furnishings,
fixtures and equipment to build out leased premises. We own all of the equipment
in our restaurants and currently plan to do so in the future.




Due to
the uniquely flexible and customized nature of our Benihana restaurant
operations and the complex design, construction and preopening processes for
each new location, our lease negotiation and restaurant development timeframes
vary for each restaurant. The development and opening process generally ranges
from 12 to 18 months after lease signing and depends largely upon the
availability of the leased space we intend to occupy and is often subject to
matters that result in delays outside of our control, usually the permitting
process, turnover of the premises from the landlord and mandates of local
governmental building authorities. The number and timing of new restaurants
actually opened during any given period, and their associated contribution, will
depend on a number of factors, including but not limited to, the identification
and availability of suitable locations and leases, the timing of the delivery of
the leased premises to us from our landlords so that we can commence our
build-out construction activities, the ability of our landlords and us to timely
obtain all necessary governmental licenses and permits to construct and operate
our restaurants, disputes experienced by our landlords or our outside
contractors, any unforeseen engineering or environmental problems with the
leased premises, weather conditions that interfere with the construction
process, our ability to successfully manage the design, construction and
preopening processes for each restaurant, the availability of suitable
restaurant management and hourly employees and general economic conditions.
While we manage those factors within our control, we have experienced unforeseen
delays in restaurant openings from time to time in the past and will likely
experience delays in the future.




Restaurant
Opening Costs for New Restaurants




Restaurant
opening costs include costs to recruit and train an average of 50 to 100 hourly
restaurant employees and management personnel, wages, travel and lodging costs
for our opening training team and other support employees, costs for practice
service activities, restaurant supplies and straight-line minimum base rent
during the restaurant preopening period for accounting purposes. Restaurant
opening costs will vary from location to location depending on a number of
factors, including the proximity to our existing restaurants, the size and
physical layout of each location, the cost of travel and lodging for different
metropolitan areas and the extent of unexpected delays, if any, in obtaining
final licenses and permits to open the restaurants, which may also be dependent
upon our landlords obtaining their licenses and permits as well as completing
their construction activities for the restaurants. Restaurant opening costs will
fluctuate from period to period, based on the number and timing of restaurant
openings and the specific restaurant opening costs incurred for each restaurant.
These fluctuations could be significant.




Renovation
of Existing Restaurants




Under a
renovation program commenced during 2005, we used many elements of the prototype
design to refurbish our mature Benihana restaurants. We made a strategic
decision in fiscal year 2006 to accelerate the renovation program in order to
opportunistically build a stronger foundation for our core brand amid a growing
American appetite for Asian cuisine. During fiscal year 2009, we completed the
renovation program with the renovation of an aggregate 22 of our mature Benihana
restaurants, using many of the design elements of the prototype Benihana
restaurant.




Renovations
required, on average, between $2.0 million and $2.3 million in capital
expenditures per restaurant. The cost to remodel each restaurant was directly
dependent on the scope of work to be performed at each location. The scope of
work could be impacted by the age of the location, current condition of the
location as well as local permitting requirements. The renovation of the older
Benihana restaurants was necessary to ensure the continued relevance of the
Benihana brand and enhance our leadership position as the premier choice for
Japanese-style dining.


4




Employees




We
currently employ approximately 5,700 people, of which approximately 100 are
corporate personnel and the balance are restaurant employees. Most employees,
except restaurant and corporate management personnel, are paid on an hourly
basis. We also employ some restaurant personnel on a part-time basis to provide
the services necessary during the peak periods of restaurant operations. We
believe our relationship with our employees is good.




Executive
Officers




Richard
C. Stockinger, age 50, serves as our Chief Executive Officer and
Director.


Juan C.
Garcia, age 45, serves as our President and Chief Operating
Officer.


Taka
Yoshimoto, age 63, serves as our Executive Vice President-Operations and
Director.


Jose I.
Ortega, age 37, serves as our Vice President-Finance and Chief Financial
Officer.




Competition




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




Government
Regulation




Each of
our restaurants is subject to licensing and regulation by health, sanitation,
safety standards, the fire department and alcoholic beverage control as well as
other authorities in the state or municipality where it is located. Difficulties
or failure in obtaining required licensing or requisite approvals could result
in delays or cancellations in the opening of new restaurants. Additionally, a
termination of a liquor license would adversely affect the revenues for a
restaurant. While we have not yet 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 our operating
results. Changes in federal and state environmental regulations have not had a
material effect on our operations, but more stringent and varied local
government requirements with respect to zoning, land use and environmental
factors could delay construction of new restaurants and materially affect our
existing restaurant operations.




We are
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, which prohibits discrimination on the basis of
disability in public accommodations and employment, mandates accessibility
standards for individuals with physical disabilities and increases the cost of
construction of new restaurants and of remodeling older
restaurants.




We are
subject to “dram-shop” statutes in most of the states where we operate
restaurants, which generally provide an individual injured by an intoxicated
person the right to recover damages from an establishment that wrongfully served
alcoholic beverages. We carry liquor liability coverage as part of our existing
comprehensive general liability insurance that we believe is consistent with
coverage carried by other entities in the restaurant industry of similar size
and scope of operations. Even though we are covered by general liability
insurance, a settlement or judgment against us under a “dram-shop” statute in
excess of our liability coverage could have a material adverse effect on our
operations.




Various
federal and state labor laws govern our operations and our relationships with
our employees, including matters such as minimum wages, breaks, overtime, fringe
benefits, safety, working conditions and work authorization requirements.
Significant increases in minimum wages, changes in statutes regarding paid or
unpaid leaves of absence, mandated health benefits or increased tax reporting
and assessment or payment requirements related to our employees who receive
gratuities all could be detrimental to the profitability of our operations.
Various proposals that would require employers to provide health insurance for
all of their employees are considered from time-to-time in Congress and various
individual states. The imposition of any requirement that we provide health
insurance to all employees could have an adverse effect on our results of
operations and financial position, as well as the restaurant industry in
general. Our suppliers may also be affected by higher minimum wage and benefit
standards, which could result in higher costs for goods and services supplied to
us. While we carry employment practices insurance, a settlement or judgment
against us in excess of our coverage limitations could have a material adverse
effect on our results of operations, liquidity, financial position or
business.




We have a
significant number of hourly restaurant employees that receive tip income. We
have elected to voluntarily participate in a Tip Rate Alternative Commitment
(“TRAC”) agreement with the Internal Revenue Service at certain locations. By
complying with the educational and other requirements of the TRAC agreement, we
reduce the likelihood of potential employer-only FICA assessments for unreported
or underreported tips.


5




Management
Information Systems




We
provide restaurant managers with centralized financial and management control
systems through use of data processing information systems and prescribed
reporting procedures. Each restaurant transmits sales, purchasing, payroll and
other operational data to our principal executive office on a weekly and
four-week period basis. This data is used to record sales, product, labor and
other costs and to prepare periodic financial and management reports. We believe
that our centralized accounting, payroll and human resources and information
systems improve our ability to control and manage our operations efficiently.
Additionally, we recently designed and implemented a new enterprise resource
planning system and certain supply chain modules to integrate and improve the
financial and operational aspects of our business.




Forward
Looking Statements




This
report contains various “forward-looking statements,” which represent our
expectations or beliefs concerning future events, including restaurant growth,
future capital expenditures and other operating information. A number of factors
could, either individually or in combination, cause actual results to differ
materially from those included in the forward-looking statements, including
changes in consumer dining preferences, fluctuations in commodity prices,
availability of qualified employees, changes in the general economy, industry
cyclicality, and in consumer disposable income, competition within the
restaurant industry, availability of suitable restaurant locations or
acquisition opportunities, harsh weather conditions in areas in which we and our
franchisees operate restaurants or plan to build new restaurants, acceptance of
our concepts in new locations, changes in governmental laws and regulations
affecting labor rates, employee benefits and franchising, ability to complete
new restaurant construction and obtain governmental permits on a reasonably
timely basis, the possibility of an adverse outcome in our dispute with the
former minority stockholders of Haru Holding Corp., unstable economic conditions
in foreign countries where we franchise restaurants and other factors that we
cannot presently foresee.


Item 1A.
                Risk
      Factors




The
recent general economic conditions and the disruptions in the financial markets
may adversely impact consumer spending patterns and the availability and cost of
credit.




The
disruptions in the financial markets have had an adverse effect on the economy,
which have negatively impacted consumer spending patterns. A decrease in
discretionary spending due to decreases in consumer confidence in the economy
has reduced the frequency with which customers choose to dine out and/or the
amount they spend on meals while dining out, thereby decreasing revenues and
adversely impacting our operating results. A continuing adverse impact of
decreasing revenues and operating results may also impact our ability to comply
with covenants contained in our credit agreement. The disruptions in the
financial markets and continuing economic downturn may adversely impact the
availability of credit already arranged and the availability and cost of credit
in the future. There can be no assurance that government responses to the
disruptions in the financial markets will restore consumer confidence, stabilize
the markets or increase the availability of credit.




Intense competition in the
restaurant industry could prevent us from increasing or sustaining our revenues
and profitability.




The
restaurant industry is intensely competitive with respect to food quality,
price-value relationships, ambiance, service and location and many restaurants
compete with us at each of our locations. There are a number of well-established
competitors with substantially greater financial, marketing, personnel and other
resources than ours, and many of our competitors are well established in the
markets where we have restaurants or where we intend to locate restaurants.
Additionally, other companies may develop restaurants that operate with similar
concepts.




Any
inability to successfully compete with the other restaurants in our markets will
prevent us from increasing or sustaining our revenues and profitability and will
result in a material adverse effect on our business, financial condition,
results of operations or cash flows. We may also need to modify or refine
elements of our restaurant system to evolve our concepts in order to compete
with popular new restaurant formats or concepts that may develop in the future.
There can be no assurance that we will be successful in implementing these
modifications or that these modifications will not reduce our
profitability.




Failure of our restaurants to
achieve expected results could have a negative impact on our revenues and
performance results.




Performance
results currently achieved by our restaurants may not be indicative of
longer-term performance and are impacted by conditions in the geographic markets
where we operate. We currently have a significant number of RA Sushi and
Benihana restaurants in the Arizona, Southern California, South Florida and
Nevada markets. Additionally, we cannot be assured that new restaurants that we
open will have similar operating results as existing restaurants. New
restaurants take several months to reach expected operating levels due to
inefficiencies typically associated with new restaurants, including lack of
market awareness, inability to hire sufficient staff and other factors. The
failure of our existing or new restaurants to perform as anticipated could have
an adverse effect on our business, financial condition, results of operations or
cash flows.


6




Changes in food costs could
negatively impact our revenues and results of operations.




Our
profitability is dependent in part on our ability to anticipate and react to
changes in food costs. Any increase in distribution and commodity costs could
cause our food costs to fluctuate. Additional factors beyond our control through
our supply chain, including energy costs, adverse weather conditions and
governmental regulation may affect our food costs. We may not be able to
anticipate and react to changing food costs through our purchasing practices and
menu price adjustments in the future and failure to do so could have an adverse
effect on our business, financial condition, results of operations or cash
flows.




Increases in the minimum wage may
have a material adverse effect on our business and financial
results.




Many of
our employees are subject to various minimum wage requirements. Many restaurants
are located in states where the minimum wage was recently increased. There
likely will be additional increases implemented in jurisdictions in which we
operate or seek to operate. Additionally, the United States Congress
enacted an increase in the federal minimum wage to be implemented in three
stages: from $5.15 to $5.85 on July 24, 2007; from $5.85 to $6.55 on July 24,
2008; and from $6.55 to $7.25 on July 24, 2009. State and federal minimum wage
increases could have an adverse effect on our business, financial condition,
results of operations or cash flows.




Rising insurance costs could
negatively impact profitability.




The cost
of insurance (workers compensation insurance, general liability insurance,
property insurance, health insurance and directors and officers liability
insurance) may increase at any time. These increases, as well as potential
federal or state legislation requirements for employers to provide health
insurance to employees, could have an adverse effect on our business, financial
condition, results of operations or cash flows if we are not able to negate the
effect of these increases with plan modifications and cost control measures or
by continuing to improve our operating efficiencies. We self-insure a
substantial portion of our workers compensation and health care costs and
unfavorable changes in trends could have an adverse effect on our business,
financial condition, results of operations or cash flows.




Fluctuations in operating results
may cause profitability to decline.




Our
operating results may fluctuate significantly as a result of a variety of
factors, including:


●
              general
      economic conditions;●
              consumer
      confidence in the economy;●
              changes
      in consumer preferences;●
              competitive
      factors;●
              weather
      conditions;●
              timing
      of new restaurant openings and related expenses;●
              timing
      and duration of temporary restaurant closures;●
              changes
      in governmental regulations;●
              revenues
      contributed by new restaurants; and●
              increases
      or decreases in comparable restaurant
revenues.




In
particular, operating results with respect to new restaurant openings may
significantly fluctuate because we typically incur the most significant portion
of restaurant opening expenses associated with a given restaurant within the
three months immediately preceding and the month of the opening of the
restaurant. Our experience to date has been that labor and operating costs
associated with a newly opened restaurant for the first several months of
operation are materially greater than what can be expected after that time, both
in aggregate dollars and as a percentage of revenues. Accordingly, the volume
and timing of new restaurant openings has had, and is expected to continue to
have, a meaningful impact on restaurant opening expenses as well as labor and
operating costs.




Numerous challenges to continued
growth could adversely affect our business, financial condition, results of
operations and cash flows.




Our
ability to expand profitably will depend on a number of factors,
including:


●
              identification
      and availability of suitable locations;●
              competition
      for restaurant sites;●
              negotiation
      of favorable lease arrangements;●
              timely
      development of commercial, residential, street or highway construction
      near our restaurants;●
              management
      of the costs of construction and development of new
      restaurants;●
              securing
      required governmental approvals and permits;●
              recruitment
      of qualified operating personnel, particularly managers and
      chefs;●
              competition
      in new markets; and●
              general
      economic conditions.




The
opening of additional restaurants in the future will depend in part upon our
ability to generate sufficient funds from operations or to obtain sufficient
equity or debt financing on favorable terms to support our expansion. We may not
be able to open our planned new operations on a timely basis, if at all, and, if
opened, these restaurants may not be operated profitably. We have experienced,
and expect to continue to experience, delays in restaurant openings from time to
time. Delays or failures in opening planned new restaurants could have an
adverse effect on our business, financial condition, results of operations or
cash flows.


7




The inability to construct new
restaurants within projected budgets and time periods will adversely affect our
business and financial condition.




Many
factors may affect the costs associated with construction of new restaurants,
including:


●
            landlord
      delays;●
            labor
      disputes;●
            shortages
      of materials and skilled labor;●
            weather
      interference;●
            unforeseen
      engineering problems;●
            environmental
      problems;●
            construction
      or zoning problems;●
            local
      government regulations;●
            modifications
      in design to the size and scope of the projects; and●
            other
      unanticipated increases in costs, any of which could give rise to delays
      or cost overruns.




If we are
not able to develop additional restaurants within anticipated budgets or time
periods, our business, financial condition, results of operations or cash flows
could be adversely affected.




Our
inability to find a sufficient number of qualified teppanyaki and sushi chefs
could negatively impact our expansion plans.




The
success of our growth strategy is dependant on hiring and training a sufficient
number of qualified teppanyaki and sushi chefs. The teppanyaki chefs are the
centerpiece of the experience at the Benihana restaurants where customers go to
be entertained by the chef’s performance at their table. Sushi chefs must
possess the skills necessary for artfully preparing fresh sushi at each of our
three concepts. Our inability to identify and hire a sufficient number of
qualified individuals for these positions could have a direct negative impact on
our ability to open new restaurants.




Implementing our growth strategies
may strain our management resources and negatively impact our competitive
position.




Our
growth strategy may strain our management, financial and other resources. We
must maintain a high level of quality and service at our existing and future
restaurants, continue to enhance our operational, financial and management
capabilities and locate, hire, train and retain experienced and dedicated
operating personnel, particularly restaurant managers and chefs. We may not be
able to effectively manage these and other factors necessary to permit us to
achieve our expansion objectives and any failure to do so could negatively
impact our competitive position.




Potential labor shortages may delay
planned openings or damage customer relations.




Our
success will continue to be dependent on our ability to attract and retain a
sufficient number of qualified employees, including restaurant managers, chefs,
kitchen staff and wait staff to keep pace with our expansion schedule. Qualified
individuals needed to fill these positions may be in short supply in certain
areas. Our inability to recruit and retain qualified individuals may delay the
planned openings of new restaurants while high employee turnover in existing
restaurants may negatively impact customer service and customer relations
resulting in an adverse effect on our business, financial condition, results of
operations or cash flows.




Our inability to retain key
personnel could negatively impact our business.




Our
success will continue to be highly dependent on retaining key operating officers
and employees. We must continue to attract, retain and motivate a sufficient
number of qualified management and operating personnel, including regional
managers, general managers and executive and sushi chefs to keep pace with our
expansion schedule. Individuals of this caliber may be in short supply and this
shortage may limit our ability to effectively penetrate new markets.
Additionally, the ability of these key personnel to maintain consistency in the
quality and atmosphere of our restaurants is a critical factor in our success.
Any failure to do so may harm our reputation and result in a loss of
business.




Litigation could have a material
adverse effect on our business.




We may be
the subject of complaints or litigation from guests alleging illness, injury or
other concerns related to visits to our restaurants. We may be adversely
affected by publicity resulting from these allegations regardless of whether
these allegations are valid or whether we are liable. We may be subject to
complaints or allegations from current, former or prospective employees. We may
also be subject to complaints or allegations from our shareholders. A lawsuit or
claim could result in an adverse decision against us that could have an adverse
effect on our business, financial condition, results of operations or cash
flows. Additionally, the costs and expense of defending ourselves against
lawsuits or claims, regardless of merit, could have an adverse impact on our
profitability.




While we
carry general liability insurance, we may still be subject to a judgment in
excess of our insurance coverage and we may not be able to obtain or continue to
maintain this insurance coverage at reasonable costs, or at
all.


8




We are
currently involved in legal proceedings, including, but not limited to the
following matter:




We are in
a dispute with the former holders of the balance of Haru’s equity (the “minority
stockholders”) concerning the amount owed by us to the former minority
stockholders in payment for shares in the subsidiary, which the former minority
stockholders elected to sell to us. The results of this matter cannot be
predicted with certainty, and an unfavorable resolution could have an adverse
effect on our business, financial condition, results of operations or cash
flows.




Failure to comply with governmental
regulations could harm our business and our reputation.




We are
subject to regulation by federal agencies and regulation by state and local
health, sanitation, building, zoning, safety, fire and other departments
relating to the development and operation of restaurants. These regulations
include matters relating to:


●
              the
      environment;●
              building
      construction;●
              zoning
      requirements;●
              the
      preparation and sale of food and alcoholic beverages;
  and●
              employment.




Our
facilities are licensed and subject to regulation under state and local fire,
health and safety codes. The construction and remodeling of restaurants will be
subject to compliance with applicable zoning, land use and environmental
regulations. We may not be able to obtain necessary licenses or other approvals
on a cost-effective and timely basis in order to construct and develop
restaurants in the future.




Various
federal and state labor laws govern our operations and our relationship with our
employees, minimum wage, overtime, working conditions, fringe benefit and work
authorization requirements. In particular, we are subject to federal immigration
regulations. Given the location of many of our restaurants, even if we operate
those restaurants in strict compliance with federal immigration requirements,
our employees may not all meet federal work authorization or residency
requirements, which could lead to disruptions in our work force.




Our
business can be adversely affected by negative publicity resulting from, among
other things, complaints or litigation alleging poor food quality, food-borne
illness or other health concerns or operating issues stemming from one or a
limited number of restaurants. Unfavorable publicity could negatively impact
public perception of our brands.




We are
required to comply with the alcohol licensing requirements of the federal
government, states and municipalities where our restaurants are located.
Alcoholic beverage control regulations require applications to state authorities
and, in certain locations, county and municipal authorities for a license and
permit to sell alcoholic beverages. Typically, licenses must be renewed annually
and may be revoked or suspended for cause at any time. Alcoholic beverage
control regulations relate to numerous aspects of the daily operations of the
restaurants, including minimum age of guests and employees, hours of operation,
advertising, wholesale purchasing, inventory control and handling and storage
and dispensing of alcoholic beverages. If we fail to comply with federal, state
or local regulations, our licenses may be revoked and we may be forced to
terminate the sale of alcoholic beverages at one or more of our
restaurants.




The
federal Americans with Disabilities Act (the “ADA”) prohibits discrimination on
the basis of disability in public accommodations and employment. We are required
to comply with the ADA and regulations relating to accommodating the needs of
disabled persons in connection with the construction of new facilities and with
significant renovations of existing facilities.




Failure
to comply with these and other regulations could negatively impact our
reputation and could have an adverse effect on our business, financial
condition, results of operations or cash flows.




Future changes in financial
accounting standards may cause adverse unexpected operating results and affect
our reported results of operations.




Changes
in accounting standards may have a significant effect on our reported results
and may affect our reporting of transactions completed before the change is
effective. New pronouncements and varying interpretations of pronouncements have
occurred and may occur in the future. Changes to existing rules or differing
interpretations with respect to our current practices could have an adverse
effect on our business, financial condition, results of operations or cash
flows.




Compliance with existing and new
regulations of corporate governance and public disclosure may result in
additional expenses.




Compliance
with changing laws, regulations and standards relating to corporate governance
and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC
regulations and NASDAQ Stock Market rules has required an increased amount of
management attention and external resources. We are committed to maintaining
high standards of corporate governance and public disclosure. This investment
required to comply with these changing regulations may result in increased
general and administrative expenses and a diversion of management time and
attention from revenue-generating activities to compliance
activities.


9




Market
forces may have an exaggerated effect on the price of our stock and as a result,
investors may not be able to resell their shares at or above the price
paid.




Market
forces may have an exaggerated effect on the volatility of our stock as a result
of, but not limited to, the following factors: we have two significant
shareholders (Benihana of Tokyo, Inc. and BFC Financial Corporation), a limited
float and low average daily trading volume. The limited float may result in
illiquidity as investors try to buy and sell, thereby exacerbating positive or
negative pressure on our stock.


Item 1B.
                Unresolved Staff
      Comments




Not
applicable.


Item 2.
                Properties




Of the 97
restaurants in operation at June 29, 2009, 13 are located on owned real estate
and 84 are leased pursuant to land or land and building leases, which require
either a specific monthly rental or a minimum rent and additional rent based
upon a percentage of gross sales. We lease approximately 16,300 square feet of
space for our general administrative offices in Miami, FL at an annual rental of
approximately $0.3 million and 1,800 square feet for a warehouse in Miami, FL at
an annual rental of approximately $40,000. The leases expire on December 31,
2010 and October 31, 2009, respectively.




We are
pursuing new locations for each of our concepts suitable for development.
Generally, location leases are “triple net” leases which pass increases in
property operating expenses, such as real estate taxes and utilities, through to
us as tenant. Expiration of our leases, including renewal options, occur at
various dates through calendar year 2029.




Of the 65
Benihana restaurants in operation at June 29, 2009:


●
              49
      are located in freestanding, special use restaurant buildings usually on
      leased lands;●
              7
      are located in shopping centers; and●
              9
      are located in office or hotel building
  complexes.




The
freestanding restaurants were built to our specifications as to size, style and
interior and exterior decor using an overall Japanese design theme. Other
locations were adapted to the Benihana interior decor. The freestanding,
Benihana restaurants, which are generally one story buildings, are on average
between 7,000 and 8,000 square feet and are constructed on a land parcel of
approximately 1.25 to 1.50 acres. Benihana restaurants located in shopping
centers, office buildings and hotels are of similar size but differ somewhat in
appearance from location to location in order to conform to the appearance of
the buildings in which they are located or limitations imposed by landlords or
municipalities. The prototype Benihana restaurant approximates 7,000 square feet
and allows for alternative design options in layout and number of
tables.




The 23 RA
Sushi restaurants in operation at June 29, 2009 are located in special-use
restaurant buildings on leased land or in shopping or “life-style” centers. All
of the restaurants were built to our specifications as to size, style and
emphasize a contemporary interior and exterior decor. These restaurants average
approximately 5,000 square feet excluding outdoor seating.




The 9
Haru restaurants in operation at June 29, 2009 are located in office or
residential buildings and vary in size and decor. We typically seek restaurant
locations that are in densely populated metropolitan areas in order to take
advantage of Haru’s take-out and delivery business. The Haru restaurants average
approximately 5,000 square feet.


10




The
following table sets forth the locations, by state, of our company-owned
restaurants at June 29, 2009:




Benihana
                
                
                RA
      Sushi
                
                
                Haru
                
                
                TotalAlaska
                
                
                1
                
                
                —
                
                
                —
                
                
                1Arizona
                
                
                3
                
                
                6
                
                
                —
                
                
                9Califonia
                
                
                14
                
                
                6
                
                
                —
                
                
                20Colorado
                
                
                2
                
                
                —
                
                
                —
                
                
                2District
      of Columbia
                
                
                1
                
                
                —
                
                
                —
                
                
                1Florida
                
                
                9
                
                
                3
                
                
                —
                
                
                12Georgia
                
                
                3
                
                
                1
                
                
                —
                
                
                4Illinois
                
                
                3
                
                
                3
                
                
                —
                
                
                6Indiana
                
                
                1
                
                
                —
                
                
                —
                
                
                1Maryland
                
                
                1
                
                
                1
                
                
                —
                
                
                2Massachusetts
                
                
                —
                
                
                —
                
                
                1
                
                
                1Michigan
                
                
                3
                
                
                —
                
                
                —
                
                
                3Minnesota
                
                
                2
                
                
                —
                
                
                —
                
                
                2Nevada
                
                
                —
                
                
                1
                
                
                —
                
                
                1New
      Jersey
                
                
                2
                
                
                —
                
                
                —
                
                
                2New
      York
                
                
                3
                
                
                —
                
                
                7
                
                
                10Ohio
                
                
                4
                
                
                —
                
                
                —
                
                
                4Oregon
                
                
                1
                
                
                —
                
                
                —
                
                
                1Pennsylvania
                
                
                2
                
                
                —
                
                
                1
                
                
                3Tennessee
                
                
                1
                
                
                —
                
                
                —
                
                
                1Texas
                
                
                7
                
                
                2
                
                
                —
                
                
                9Utah
                
                
                1
                
                
                —
                
                
                —
                
                
                1Virginia
                
                
                1
                
                
                —
                
                
                —
                
                
                1Total
                
                
                65
                
                
                23
                
                
                9
                
                
                97




The
following table sets forth the locations, by state, of our restaurants under
development at June 29, 2009:




Under
      developmentBenihana
                                  
                                  
                                  RA
      Sushi
                                  
                                  
                                  TotalFlorida
                                  
                                  
                                  —
                                  
                                  
                                  1
                                  
                                  
                                  1Kansas
                                  
                                  
                                  —
                                  
                                  
                                  1
                                  
                                  
                                  1New
      Jersey
                                  
                                  
                                  1
                                  
                                  
                                  —
                                  
                                  
                                  1Texas
                                  
                                  
                                  —
                                  
                                  
                                  1
                                  
                                  
                                  1Total
                                  
                                  
                                  1
                                  
                                  
                                  3
                                  
                                  
                                  4




Item 3.
                Legal
      Proceedings




Haru Minority Stockholders
Litigation




In
December 1999, we completed the acquisition of 80% of the equity of Haru Holding
Corp. (“Haru”). The acquisition was accounted for using the purchase method of
accounting. Pursuant to the purchase agreement, at any time during the period
from July 1, 2005 through September 30, 2005, the holders of the balance of
Haru’s equity (the “minority stockholders”) had a one-time option to sell their
remaining shares to us (the “put option”). The exercise price under the put
option was to be calculated as four and one-half (41⁄2) times Haru’s consolidated
cash flow for the fiscal year ended March 27, 2005 less the amount of Haru’s
debt (as that term is defined in the purchase agreement) at the date of the
computation. On July 1, 2005, the minority stockholders exercised the put
option, and we acquired the remaining 20% of the equity of Haru.




We
believe that the proper application of the put option price formula would result
in a payment to the former minority stockholders of approximately $3.7 million.
We have offered to pay this amount to the former minority stockholders and
recorded a $3.7 million liability with respect thereto.




On August
25, 2006, the former minority stockholders sued us. The suit (which was filed in
the Supreme Court of the State of New York, County of New York, but has been
removed to the United States District Court for the Southern District of New
York) sought an award of $10.7 million, based on the former minority
stockholders’ own calculation of the put option price formula and actions
allegedly taken by us to reduce the value of the put option.




On
December, 19, 2007, the Court dismissed all of the claims against us, except for
the breach of fiduciary duty and breach of contract claims. On January 25, 2008,
we filed our Answer and Affirmative Defenses to the Amended Complaint. The
parties have completed fact and expert discovery. On December 22, 2008, the
Court entered an order referring the case for a settlement conference. No
settlement was reached. On April 3, 2009, both parties filed motions for summary
judgment. During May 2009, each party responded to the other's motion
for summary judgement. The parties are currently waiting for the Court to rule
on these motions.


11




We
believe that we have correctly calculated the put option price and that the
claims of the former minority stockholders are without merit. However, there can
be no assurance as to the outcome of this litigation.




Other
Litigation




On May
17, 2007, Benihana Monterey Corporation, a subsidiary of ours, filed a complaint
in the action, Benihana Monterey
Corporation v. Nara Benihana Monterey, Inc., et al. The action was
commenced against various defendants in connection with a default on a
promissory note in the amount of $0.4 million signed by one of our franchisees
and a personal guaranty signed by the owner of the franchise. We obtained
judgment against the defendant for approximately $0.5 million, including
repayment of the $0.4 million promissory note, interest and costs. We served the
defendant with an order regarding examination of the defendant’s assets and
filed a subpoena requiring the defendant and the defendant’s entities to produce
substantial documents. During fiscal year 2008, we recorded a $0.4 million
reserve for the estimated portion of the promissory note and accrued interest
that, at the time, we believed would not be collectible. On December 4, 2008, we
entered into a franchise agreement with a third-party for the operation of the
Benihana Monterey location and, concurrently, entered into an agreement for the
sale of the Benihana Monterey location’s assets, which had collateralized the
promissory note. The proceeds from the sale of assets resulted in a partial
recovery of approximately $0.4 million of the promissory note, accrued interests
and costs. The defendant has since filed for bankruptcy and has been discharged
of all debts, including our judgment. The remaining balance of the promissory
note and accrued interest is not probable of being collected and was written off
during fiscal year 2009.




We are
not subject to any other significant pending legal proceedings, other than
ordinary routine claims incidental to our 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 of fiscal year 2009.




PART
II


Item 5.
                Market for the
      Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity
Securities




Certain
information required by this Item is incorporated herein by reference from the
information under the caption “Common Stock Information” contained in our 2009
Annual Report to Shareholders.


Item 6.
                Selected Financial
      Data




The
information required by this Item is incorporated herein by reference from the
information under the caption “Selected Financial Data” contained in our 2009
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 from the
information under the caption “Management’s Discussion and Analysis” contained
in our 2009 Annual Report to Shareholders.


Item 7A.
                Quantitative and
      Qualitative Disclosures About Market
  Risks




The
information required by this Item is incorporated herein by reference from the
information under the caption “Quantitative and Qualitative Disclosures about
Market Risks” contained in our 2009 Annual Report to Shareholders.


Item 8.
                Financial Statements
      and Supplementary
Data




The
information required by this Item is incorporated herein by reference from the
information under the caption “Consolidated Financial Statements” contained in
our 2009 Annual Report to Shareholders.


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




None.


12




Item 9A.
                Controls and
      Procedures




Evaluation
of Disclosure Controls and Procedures




We
carried out an evaluation under the supervision and with the participation of
our management, including our principal executive officer and principal
financial officer, of the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report. Based upon that
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of the date of
such evaluation.




Internal
Control Over Financial Reporting




Management’s
report on our internal control over financial reporting (as such term is defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) is included in our 2009
Annual Report to Shareholders under the caption “Management’s Report on Internal
Control over Financial Reporting” and is incorporated by reference.




Changes
in Internal Control over Financial Reporting




During
fiscal year 2009, we began designing and implementing a new enterprise resource
planning (“ERP”) system and certain supply chain modules to integrate and
improve the financial and operational aspects of our business. On November 11,
2008, we transitioned our financial accounting and reporting processes to the
new ERP system as part of a phased implementation plan. The implementation of
this new ERP system involved changes to our procedures for internal control over
financial reporting. We followed a detailed implementation plan that required
significant pre-implementation planning, design and testing. We also conducted
an extensive post-implementation review to ensure that the internal controls
over financial reporting were properly designed.




We
remediated the material weakness in our internal control over financial
reporting identified as of January 4, 2009 related to the application of
Statement of Financial Accounting Standards No. 142, “Goodwill and Other
Intangible Assets” (“SFAS 142”), by enhancing our controls over the preparation
and the review of the goodwill impairment tests required by SFAS 142,
specifically by adding the assistance of a third-party valuation firm in the
review of the impairment tests.




With the
exception of the changes discussed above, there have been no changes to our
internal control over financial reporting in connection with the evaluation
required by paragraph (d) of Rule 13a-15 of the Exchange Act during the most
recently completed fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


Item 9B.
                Other
      Information




None.


13


PART
III


Item 10.
                Directors, Executive
      Officers and Corporate
Governance




The
information required by this Item is incorporated herein by reference from the
information under the caption “Election of Directors” contained in our Proxy
Statement for our 2009 Annual Meeting of Stockholders (“our proxy
statement”).




We have
adopted a written code of business conduct and ethics that applies to our Chief
Executive Officer, Chief Financial Officer and all of our officers and directors
and can be found on our website, which is located at www.benihana.com. We intend to make
all required disclosures concerning any amendments to, or waivers from, our code
of business conduct and ethics on our website.


Item 11.
                Executive
      Compensation




The
information required by this Item is incorporated herein by reference from the
information under the caption “Executive Compensation” contained in our proxy
statement.


Item 12.
                Security Ownership of
      Certain Beneficial Owners and Management and Related Stockholder
      Matters




The
information required in part by this Item is incorporated herein by reference
from the information under the caption “Security Ownership of Certain Beneficial
Owners of Management” contained in our proxy statement.




The
following sets forth certain information, as of March 29, 2009, with respect to
our equity compensation plans, under which our securities may be
issued:




Equity
Compensation Plan Information




Plan
      Category
                              
                              Number
      of securities to
                                be
      issued upon exercise
                                of
      outstanding options,
                                warrants
      and rights
                                (a)
                              
                              Weighted
      average
                                exercise
      price of
                                outstanding
      options,
                                warrants
      and rights
                                (b)
                              
                              Number
      of securities
                                remaining
      available for
                                future
      issuance under
                                equity
      compensation
                                plans
      (excluding
                                securities
      reflected in
                                column
      (a))
                                (c)Equity
      compensation plans approved by security holders
                              
                              
                              1,601,738
                              (1)
                              $
                              9.64
                              
                              
                              310,700
                              (2)Equity
      compensation plans not approved by security holders
                              
                              
                              8,625
                              (3)
                              
                              5.23
                              
                              
                              —Total
                              
                              
                              1,610,363
                              
                              $
                              9.61
                              
                              
                              310,700




(1)
              Consists
      of 398,604 shares of common stock and 1,211,759 shares of Class A common
      stock, in each case, underlying outstanding options under the 2007 Equity
      Incentive Plan (2007 plan) and the prior plans.(2)
              Consists
      of Class A common stock reserved for issuance under the 2007
      plan.(3)
              Consists
      of 2,875 shares of common stock and 5,750 shares of Class A common stock,
      in each case, underlying outstanding options under a stock option
      agreement with one of our
directors.




Item 13.
                Certain Relationships
      and Related Transactions and Director
  Independence




The
information required by this Item is incorporated herein by reference from the
information under the caption “Certain Relationships and Related Transactions”
contained in our proxy statement.


Item 14.
                Principal Accountant
      Fees and
Services




The
information required by this item is incorporated herein by reference from the
information under the caption “Principal Accountant Fees and Services” contained
in our proxy statement.


14




PART
IV


Item 15.
                Exhibits and Financial
      Statement
Schedules





(a)
                    1.
                    Financial
      Statements:The
      following consolidated financial statements of Benihana Inc. and its
      subsidiaries (“the Company”), which are set forth on pages 19 through 41
      of our 2009 Annual Report to Shareholders included herein as Exhibit
      13.01, are incorporated herein by reference as part of this
      report.Consolidated
      Statements of Earnings for the fiscal years ended March 29, 2009, March
      30, 2008 and April 1, 2007.Consolidated
      Balance Sheets as of March 29, 2009 and March 30, 2008.Consolidated
      Statements of Stockholders’ Equity for the fiscal years ended March 29,
      2009, March 30, 2008 and April 1, 2007.Consolidated
      Statements of Cash Flows for the fiscal years ended March 29, 2009, March
      30, 2008 and April 1, 2007.Notes
      to Consolidated Financial Statements.Report
      of Independent Registered Public Accounting Firm.Management’s
      Report on Internal Control Over Financial Reporting.2.
                    Financial
      Statement Schedules:None3.
                    Exhibits:2.01
                    Amended
      and Restated Agreement and Plan of Reorganization dated as of December 29,
      1994 and amended as of March 17, 1995 among BNC, BOT, the Company and BNC
      Merger Corp. Incorporated by reference to Exhibit 2.01 to the Company’s
      Registration Statement on Form S-4, Registration No. 33-88295, made
      effective March 23, 1995 (the “S-4”).3.01
                    Certificate
      of Incorporation of the Company. Incorporated by reference to Exhibit 3.01
      to the S-4 and to Exhibit 1 on Form 8-A dated February 12,
      1997.3.02
                    By-Laws
      of the Company, amended as of June 11, 2009. Incorporated by reference to
      Exhibit 3.02 to Form 8-K filed June 11, 2009.4.01
                    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 Form 8-K dated May 15, 1995.4.02
                    Form
      of Certificate representing shares of the Company’s Common Stock.
      Incorporated by reference to Exhibit 4.02 to the S-4.4.03
                    Form
      of Certificate representing shares of the Company’s Class A Common Stock.
      Incorporated by reference to Exhibit 4.03 to the S-4.10.01
                    License
      Agreement, dated as of May 15, 1995 between BNC and BOT. Incorporated by
      reference to Exhibit 10.01 to the S-4.10.02
                    1997
      Class A Stock Option Plan. Incorporated by reference to Exhibit A to the
      Company’s Proxy Statement for its Annual Meeting of Stockholders held on
      August 27, 1998 (the “1998 Proxy Statement”).10.03
                    Amended
      and Restated Directors’ Stock Option Plan. Incorporated by reference to
      Exhibit B to the 1998 Proxy Statement.10.04
                    2000
      Employees’ Class A Common Stock Option Plan. Incorporated by reference to
      Exhibit A to the Company’s Proxy Statement for its Annual Meeting of
      Stockholders held on August 3, 2000.10.05
                    2003
      Directors’ Stock Option plan. Incorporated by reference to Exhibit A to
      the Company’s Proxy Statement for its Annual Meeting of Stockholders held
      on August 21, 2003.


15




10.06
                  Stockholders
      Agreement dated as of December 6, 1999 by and among Haru Holding Corp.,
      BNC, Mei Ping Matsumura and the Estate of Arthur Cutler. Incorporated by
      reference to Exhibit 10.10 to the Company’s Registration Statement on Form
      S-2, Registration Number 333-68946.10.07
                  Preferred
      Stock Purchase Agreement between Benihana Inc. and BFC Financial
      Corporation dated June 8, 2004. Incorporated by reference to Exhibit 10.19
      of the 2004 10-K.10.08
                  Agreement
      of Sale dated April 17, 2006 by and among Benihana Lincoln Road Corp.,
      Benihana National Corp., Doraku Lincoln Road LLC and Aoki Group LLC.
      Incorporated by reference to Exhibit 10.1 to Form 8-K filed April 21,
      2006.10.09
                  Restrictive
      Covenant and Agreement not to Disclose Confidential Information dated
      April 17, 2006 by and between Kevin Aoki and Benihana Inc. Incorporated by
      reference to Exhibit 10.2 to Form 8-K filed April 21,
  2006.10.10
                  Credit
      Agreement, dated March 15, 2007, between the Company and its subsidiaries
      and Wachovia Bank, National Association. Incorporated by reference to
      Exhibit 10.1 to Form 8-K filed March 16, 2007.10.11
                  Promissory
      Noted dated March 15, 2007 by the Company in favor of Wachovia Bank,
      National Association. Incorporated by reference to Exhibit 10.2 to Form
      8-K filed March 16, 2007.10.12
                  Security
      Agreement, dated March 15, 2007, by and among the Company and its
      subsidiaries and Wachovia Bank, National Association. Incorporated by
      reference to Exhibit 10.3 to Form 8-K filed March 16,
  2007.10.13
                  Pledge
      Agreement, dated March 15, 2007, by and among the Company and its
      subsidiaries and Wachovia, National Association. Incorporated by reference
      to Exhibit 10.4 to Form 8-K filed March 16, 2007.10.14
                  Benihana
      Executive Incentive Compensation Plan. Incorporated by reference to
      Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the
      quarter ended July 22, 2007.10.15
                  Amended
      and Restated Rights Agreement, dated as of January 31, 2007 between
      American Stock Transfer & Trust Company and the Company. Incorporated
      by reference to Exhibit 99.1 to Form 8-K filed February 2, 2007 and
      Exhibit 99.2 to Form 8-K filed May 21, 2007.10.16
                  Amendment,
      dated as of May 18, 2007, to Amended and Restated Rights Agreement, dated
      as of January 31, 2007, by and between the Company and American Stock
      Transfer & Trust Company. Incorporated by reference to Exhibit 99.1 to
      Form 8-K filed May 21, 2007.10.17
                  2007
      Equity Incentive Plan. Incorporated by reference to Exhibit 4.02 to Form
      S-8 filed April 18, 2008.10.18
                  Form
      of Director Stock Option Agreement under the 2007 Equity Incentive Plan.
      Incorporated by reference to Exhibit 10.01 to Form S-8 filed April 18,
      2008.10.19
                  Form
      of Employee Stock Option Agreement under the 2007 Equity Incentive Plan.
      Incorporated by reference to Exhibit 10.02 to Form S-8 filed April 18,
      2008.10.20
                  Form
      of Employee Restricted Stock Agreement under the Company’s 2007 Equity
      Incentive Plan. Incorporated by reference to Exhibit 4.03 to Form S-8
      filed April 18, 2008.10.21
                  Employment
      Agreement dated March 17, 2008 between Joel A. Schwartz and the Company.
      Incorporated by reference to Exhibit 10.34 to Form 10-K filed June 13,
      2008.10.22
                  Second
      Amendment to Credit Agreement, dated November 19, 2008, by and among the
      Company and Wachovia Bank, National Association. Incorporated by reference
      to Exhibit 10.1 to Form 8-K filed November 21, 2008.10.23
                  Amendment,
      dated November 6, 2008, by and between the Company and Wachovia Bank,
      National Association. Incorporated by reference to Exhibit 10.2 to Form
      8-K filed November 21, 2008.10.24
                  Third
      Amendment to Credit Agreement and Consent, dated February 9, 2009, by and
      among the Company and Wachovia Bank, National Association. Incorporated by
      reference to Exhibit 10.1 to Form 8-K filed February 13,
    2009.


16




10.25
                      Letter
      Agreement, dated February 9, 2009, by and between the Company and Joel A.
      Schwartz. Incorporated by reference to Exhibit 10.2 to Form 8-K filed
      February 13, 2009.10.26
                      Amended
      and Restated Employment Agreement dated March 31, 2008 between Juan C.
      Garcia and the Company. Incorporated by reference to Exhibit 10.35 of the
      Company’s Quarterly Report on Form 10-Q/A filed June 26,
    2009.10.27
                      Amended
      and Restated Employment Agreement dated March 31, 2008 between Jose I.
      Ortega and the Company. Incorporated by reference to Exhibit 10.36 of the
      Company’s Quarterly Report on Form 10-Q/A filed June 26,
    2009.10.28
                      Amended
      and Restated Employment Agreement dated March 31, 2008 between Taka
      Yoshimoto and the Company. Incorporated by reference to Exhibit 10.37 of
      the Company’s Quarterly Report on Form 10-Q/A filed June 26,
      2009.10.29
                      Amendment
      to Preferred Stock Agreement, dated as of June 10, 2009, between the
      Company and BFC Financial Corporation. Incorporated by reference to
      Exhibit 10.1 to Form 8-K filed June 11, 2009.13.01
                      Portions
      of the Annual Report to Stockholders for the year ended March 29,
      2009.21.01
                      Subsidiaries.23.01
                      Consent
      of Independent Registered Public Accounting Firm.31.01
                      Chief
      Executive Officer’s certification pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.02
                      Chief
      Financial Officer’s certification pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.01
                      Chief
      Executive Officer’s certification pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.02
                      Chief
      Financial Officer’s certification pursuant to Section 906 of the
      Sarbanes-Oxley Act of
2002.


17




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 29, 2009
                BENIHANA
      INC.By:
      /s/ Jose I. OrtegaJose
      I. Ortega, Vice President of Financeand
      Treasurer – Chief Financial
Officer




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/
      Richard C. Stockinger
                                    
                                    Chief
      Executive Officer and Director
                                    
                                    June
      29, 2009Richard
      C. Stockinger/s/
      Jose I. Ortega
                                    
                                    Vice
      President of
                                    
                                    June
      29, 2009Jose
      I. Ortega
                                    
                                    Finance
      and Treasurer -Chief
      Financial Officer(Principal
      Financial andAccounting
      Officer)/s/
      John E. Abdo
                                    
                                    Vice
      Chairman and Director
                                    
                                    June
      29, 2009John
      E. Abdo/s/
      Norman Becker
                                    
                                    Director
                                    
                                    June
      29, 2009Norman
      Becker/s/
      J. Ronald Castell
                                    
                                    Director
                                    
                                    June
      29, 2009J.
      Ronald Castell/s/
      Darwin C. Dornbush
                                    
                                    Chairman
      and Director
                                    
                                    June
      29, 2009Darwin
      C. Dornbush/s/
      Lewis Jaffe
                                    
                                    Director
                                    
                                    June
      29, 2009Lewis
      Jaffe/s/
      Alan B. Levan
                                    
                                    Director
                                    
                                    June
      29, 2009Alan
      B. LevanDirector
                                    
                                    June
      __, 2009Joseph
      J. West/s/
      Taka Yoshimoto
                                    
                                    Executive
      Vice President -
                                    
                                    June
      29, 2009Taka
      Yoshimoto
                                    
                                    Restaurant
      Operationsand
      Director




18