What were the total future minimum rental commitments for Auntie Annes as of December 31, 2023?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| Payments - | ||
|---|---|---|
| Operating | Receipts - | |
| For the fiscal years: | leases | Subleases |
| 2024 | $ 15,259 $ | (6,909) |
| 2025 | 14,114 | (4,994) |
| 2026 | 11,948 | (3,803) |
| 2027 | 8,976 | (2,096) |
| 2028 | 5,759 | (830) |
| Thereafter | 38,383 | (463) |
| Total future minimum rental commitments | 94,439 | (19,095) |
| Less: Imputed interest | (18,854) | - |
| Present value of lease liabilities | 75,585 $ | (19,095) |
| Less: Current portion | (12,309) | |
| Long-term operating lease liabilities | $ 63,276 |
Certain subsidiaries are the guarantors of certain real property lease arrangements on behalf of certain of their franchisees. The potential maximum future minimum lease payments these subsidiaries could be held liable for under these lease arrangements and guarantees was $40,059 as of December 31, 2023, and the subsidiaries expect that any amounts that may ultimately be paid thereunder will not be material.
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the total future minimum rental commitments as of December 31, 2023, were $94,439 for operating leases. However, this amount is offset by $(19,095) in receipts from subleases. After accounting for imputed interest of $(18,854), the present value of lease liabilities is $75,585. The current portion of these liabilities, amounting to $(12,309), is then subtracted to arrive at long-term operating lease liabilities of $63,276.
These figures provide a detailed breakdown of Auntie Anne's lease obligations. The "Operating leases" represent the minimum payments Auntie Anne's is obligated to pay for its leased properties, while "Receipts - Subleases" indicates income Auntie Anne's receives from subleasing some of those properties. The imputed interest reflects the interest portion of the lease payments, and the present value of lease liabilities represents the discounted value of the future lease payments.
For a prospective franchisee, understanding these lease commitments is crucial. It shows the financial obligations Auntie Anne's has undertaken, which could indirectly affect franchisees through the financial health of the company. Additionally, the sublease income can be seen as a potential revenue stream that could offset some of the leasing costs. It is important to note that these figures represent the company's obligations and not necessarily those of individual franchisees, who will have their own lease arrangements for their specific locations.
It is also important to note that certain subsidiaries are the guarantors of certain real property lease arrangements on behalf of certain of their franchisees. The potential maximum future minimum lease payments these subsidiaries could be held liable for under these lease arrangements and guarantees was $40,059 as of December 31, 2023.