What was the net lease cost for Aplus in 2023?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
ional contingent or variable lease payments based on factors specific to the individual agreement. Variable lease payments we are typically responsible for include payment of real estate taxes, maintenance expenses and insurance.
The components of lease expense consisted of the following:
| Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|
| Lease cost | 2023 | 2022 | |||||
| Classification | |||||||
| Operating lease costs: | |||||||
| Operating lease cost | Lease expense | $ | 51 $ | 49 | |||
| Finance lease costs: | |||||||
| Amortization of leased assets | Depreciation, amortization and accretion | — | — | ||||
| Interest on lease liabilities | Interest expense | — | — | ||||
| Short-term lease cost | Lease expense | 2 | 2 | ||||
| Variable lease cost | Lease expense | 15 | 12 | ||||
| Sublease income | Lease income | (42) | (39) | ||||
| Net lease cost | $ | 26 $ | 24 | ||||
| Lease term and discount rate | December 31, 2023 | Decemb |
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, the net lease cost for the year 2023 was $26. This figure represents the overall cost to Aplus for leasing property, taking into account various factors such as operating lease costs, short-term lease costs, variable lease costs, and sublease income. Understanding the components of this net lease cost can provide insight into the financial obligations Aplus has regarding its leased properties.
Specifically, the net lease cost is calculated by combining several lease-related expenses and income. For 2023, these included operating lease costs of $51, short-term lease costs of $2, variable lease costs of $15, and a reduction due to sublease income of $42. The net effect of these items resulted in the reported net lease cost of $26.
For a prospective Aplus franchisee, understanding these lease costs is crucial as it reflects the financial health and stability of the company. It is also important to note that the weighted average remaining lease term for operating leases was 22 years as of December 31, 2023, with a weighted average discount rate of 6%. These factors can influence future lease costs and should be considered when evaluating the financial performance of Aplus.