What is the present value of lease liabilities, after imputed interest is deducted, for Auntie Annes?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, | December 25, | |
|---|---|---|
| For the fiscal years ended: | 2023 | 2022 |
| Operating lease costs | $ 17,486 | $ 19,080 |
| Variable lease cost | 3,478 | 2,196 |
| Total operating lease costs | $ 20,964 | $ 21,276 |
Total operating lease costs include rental expense related to leases for Company SBRs recorded to Company store, bakery and restaurant operations expenses, leased properties that are subsequently subleased to franchisees recorded to Franchise and other rental expense, and leases for corporate offices recorded to Selling, ge
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the present value of lease liabilities is calculated after deducting imputed interest. For the fiscal year 2024, the present value of lease liabilities is reported as $75,585. This figure represents the discounted value of future minimum rental commitments, taking into account the time value of money. The total future minimum rental commitments before deducting imputed interest amount to $94,439. The imputed interest, which is the estimated interest portion of these lease payments, is $18,854.
This calculation is crucial for understanding Auntie Annes's financial obligations related to its leases. The present value of lease liabilities provides a more accurate picture of the actual debt burden associated with these leases compared to the undiscounted future rental commitments. Additionally, the current portion of these lease liabilities, which is $12,309, represents the amount due within the next year. The remaining portion, referred to as long-term operating lease liabilities, is $63,276.
For a prospective Auntie Annes franchisee, understanding these lease liabilities is essential. It helps in assessing the financial health and stability of the company. Franchisees should be aware of how Auntie Annes manages its lease obligations, as this can impact the overall financial performance of the franchise system. Reviewing these figures in the FDD provides valuable insight into the company's financial practices and its approach to managing long-term liabilities.