What was the amount of the lease liability, long-term, for Aunt Millies Bakeries as of September 30, 2023?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
es the property back. The lease term is for 10 years at a monthly cost approximately $91,804 through October 2020 and increasing to $102,664 through May 2029. The lease is an operating lease and is included in the minimum lease payment schedule in Note 6. The lessee is responsible for all maintenance, insurance and taxes on the property. The transaction resulted in a net gain on sale of the property approximating $1,154,000, which was included in other liabilities and is being amortized over the life of the corresponding lease.
During 2020, the Company entered into a sale and leaseback transaction with an external party. The Company sold land and buildings in exchange for cash totaling $4,600,000, with net proceeds approximating $4,200,000 after closing costs, and leases the property back. The lease term is for 20 years at a monthly cost approximately $21,551 starting February 2020 and increasing to $45,780 through February 2040. The lessee is responsible for all maintenance, insurance and taxes on th
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the balance of the deferred gain related to sale and leaseback transactions was approximately $2,604,000 as of September 30, 2023. This amount is recorded in accrued expenses (short term) and other liabilities (long term) on the consolidated balance sheets.
In 2020, Aunt Millies Bakeries entered into a sale and leaseback transaction where they sold land and buildings for $4,600,000 and leased the property back. The lease term is for 20 years, with monthly costs starting at approximately $21,551 and increasing to $45,780 through February 2040. The initial transaction resulted in a gain of approximately $2,234,000, which is being amortized over the lease term.
For a prospective franchisee, this indicates that Aunt Millies Bakeries engages in sale and leaseback transactions, which can affect the company's financial statements. The deferred gain from these transactions is split between short-term accrued expenses and long-term liabilities. Understanding these lease obligations and their impact on the financial health of Aunt Millies Bakeries is important for assessing the overall stability and financial practices of the company.