What was the total lease expense for 7 Brew for the year ended December 29, 2024?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
Company currently leases office space with terms expiring through July 2027. All leases are classified as operating leases.
Total lease expense for the years ended December 29, 2024, December 31, 2023 and December 25, 2022, was $0.30 million, $0.06 million, and $0.03 million, respectively, and included in Selling, general and administrative expenses in the accompanying Statements of Operations.
Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 29, 2024, December 31, 2023, and December 25, 2022 was $0.23 million, $0.06 million and $0.03 million, respectively. The Company used its incremental borrowing rate as the discount rate to calculate the operating lease liability, which was 6.5% and 6.0% for the years ended December 31, 2023 and December 25, 2022, respectively. The weighted average remaining lease term is app
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 82)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the total lease expense for the year ended December 29, 2024, was $0.30 million. The FDD also provides lease expense information for the two prior years. For the year ended December 31, 2023, the total lease expense was $0.06 million, and for the year ended December 25, 2022, it was $0.03 million. These expenses are included in Selling, general and administrative expenses in the Statements of Operations.
For a prospective franchisee, this indicates a significant increase in lease expenses for 7 Brew over the three-year period. This could be due to the company leasing more space as it grows, or due to increases in lease rates. It's important to note that these figures represent 7 Brew's corporate expenses, not the lease expenses that a franchisee would incur for their individual location. Franchisees should expect to pay their own lease expenses, which will vary depending on the location and size of their 7 Brew stand.
The FDD also states that the company leases office space with terms expiring through July 2027, and all leases are classified as operating leases. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 29, 2024, December 31, 2023, and December 25, 2022 was $0.23 million, $0.06 million and $0.03 million, respectively. The weighted average remaining lease term is approximately 2.6 years at December 29, 2024.