As of December 31, 2024, how were 360 Painting's facility leases classified?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
Charlottesville, Virginia
April 22, 2025
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 943,020 $ | 722,074 |
| Accounts receivable, net | 3,218,426 | 2,838,106 |
| Prepaid expenses and other current assets | 3,666,212 | 2,486,419 |
| Total current assets | 7,827,658 | 6,046,599 |
| Property and equipment, net | 762,462 | 728,024 |
| Right-of-use lease asset, net | 1,476,728 | 1,633,661 |
| Intangible assets, net | 11,433,105 | 12,925,497 |
| Goodwill | 7,068,689 | 7,068,689 |
| Other assets | 7,888,574 | 7,097,279 |
| Total assets | $ 36,457,216 $ | 35,499,749 |
| Liabilities and Members' Deficit | ||
| Current liabilities | ||
| Accounts payable | $ 434,745 $ | 435,883 |
| Accrued and other liabilities | 3,365,005 | 3,368,024 |
| Deferred revenue, current | 2,041,424 | 1,860,040 |
| Lease liability, current portion | 150,635 | 124,701 |
| Current maturities of long-term debt | 609,375 | 599,500 |
| Total current liabiliti |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to 360 Painting's 2025 Franchise Disclosure Document, the company classifies its facility leases as "Right-of-use lease asset, net" and "Lease liability, noncurrent portion." As of December 31, 2024, the net right-of-use lease asset was valued at $1,476,728. The noncurrent portion of the lease liability was $1,378,826. The current portion of the lease liability was $150,635.
This classification is important for prospective franchisees to understand because it reflects how 360 Painting accounts for its lease obligations on its balance sheet. The right-of-use asset represents the company's right to use the leased assets, while the lease liability represents its obligation to make lease payments. The net value of the right-of-use asset takes into account accumulated amortization. The lease liability is separated into current (due within one year) and noncurrent (due in more than one year) portions, reflecting the timing of the required payments.
Reviewing these figures allows potential franchisees to assess 360 Painting's financial health and its obligations related to leased facilities. Keep in mind that these figures reflect the financial position of Premium Service Brands, LLC and Subsidiaries, the parent company and guarantor of 360 Painting, not necessarily the individual franchise locations. Individual franchisees will have their own lease obligations that are not reflected in this consolidated statement.