What is the present value of net minimum lease payments for an Atwell Suites franchise?
Atwell_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Net minimum lease payments | 3,191,328 |
|---|---|
| Less amount representing interest | (2,930,124) |
| Present value of net minimum lease payments | $ 261,204 |
| Less amount representing interest | (11,225) |
|---|---|
| Present value of net minimum lease payments | $ 84,195 |
As described in Note 3, the Company has a finance lease on the InterContinental Hotel in Boston, Massachusetts. The lease commenced on August 1, 2006, with the first lease payment due on August 1, 2007. Interest expense of $23.2 million, $23.0 million and $22.9 million was incurred for the years ended December 31, 2024, 2023 and 2022, respectively. Accrued interest of $78.4 million and $76.3 million is included within 'finance lease obligations' on the consolidated balance sheets as of December 31, 2024 and 2023, respectively.
The future minimum lease payments required under the finance lease and the present value of the net minimum lease payments as of December 31, 2024, are (in thousands):
Minimum rental commitments exclude variable rentals which are payable based on percentages of revenue.
Source: Item 23 — Receipts (FDD pages 99–486)
What This Means (2025 FDD)
According to the 2025 FDD, Atwell Suites has two different present values of net minimum lease payments listed. One is associated with a net minimum lease payment of $3,191,328, while the other is associated with future minimum lease payments for the years 2025-2029 and thereafter.
For the net minimum lease payment of $3,191,328, the amount representing interest is ($2,930,124), resulting in a present value of net minimum lease payments of $261,204. For the other, the amount representing interest is ($11,225), with a present value of net minimum lease payments of $84,195.
It is important to note that these figures are related to a finance lease on the InterContinental Hotel in Boston, Massachusetts, which commenced on August 1, 2006. The FDD also mentions that minimum rental commitments exclude variable rentals which are payable based on percentages of revenue. A prospective Atwell Suites franchisee should clarify with the franchisor which of these figures is relevant to their specific franchise agreement and location, as well as understand how variable rentals might impact their overall lease obligations.