What are the total future lease payments for Aunt Millies Bakeries to related parties?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
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The following table represents the weighted-average remaining lease term and discount rate as of September 30, 2024 and 2023:
| 2024 | 2023 | |
|---|---|---|
| Weighted average remaining lease term (years) Weighted average discount rate | 6.86 | 9.72 |
| 3.74% | 4.26% |
Future undiscounted lease payments for the Corporation's lease liabilities are as follows as of September 30, 2024:
| R | elated Parties | 9 | Third Parties | Total | ||
|---|---|---|---|---|---|---|
| 2025 | $ | 1,731,497 | $ | 3,546,573 | $ | 5,278,070 |
| 2026 | 1,513,587 | 2,899,996 | 4,413,583 | |||
| 2027 | 1,158,988 | 2,120,538 | 3,279,526 | |||
| 2028 | 1,032,306 | 1,548,750 | 2,581,056 | |||
| 2029 | 974,241 |
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the company has future lease payment obligations, broken down by year, to both related and third parties. The total future lease payments to related parties are $10,960,127. These payments are scheduled to be made as follows: $1,731,497 in 2025, $1,513,587 in 2026, $1,158,988 in 2027, $1,032,306 in 2028, $974,241 in 2029, and $4,549,508 thereafter.
It is important to note that these figures represent the total undiscounted lease payments. The FDD also provides the present value of these lease liabilities after deducting imputed interest. The imputed interest for related parties totals $1,920,612, bringing the present value of lease liabilities to $9,039,515. The current portion of these lease liabilities is listed as $1,417,438, with the non-current portion being $7,622,077.
Prospective franchisees should understand the nature of these related-party lease agreements. It would be prudent to inquire about the specific terms of these leases, the identity of the related parties, and how these arrangements might affect the financial stability or operational decisions of Aunt Millies Bakeries. Understanding the details behind these lease obligations is a crucial part of assessing the overall financial health of the franchise system.