What was the change in operating lease liability for Bath Tune Up as of December 31, 2023?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Liabilities and Member's Equity | ||
| Current liabilities | ||
| Accounts payable $ 318,262 $ 5,557 | ||
| Accrued liabilities 476,363 514,466 | ||
| Operating lease liability, current 55,093 57,206 | ||
| Advertising advances and deposits 9,926 156,605 | ||
| Deferred revenue 650,085 622,556 | ||
| Total Current liabilities 1,509,729 1,356,390 | ||
| Operating lease liability, long-term 117,183 172,276 | ||
| Total Liabilities 1,626,912 1,528,666 | ||
| Commitments and Contingencies (Note 6) | ||
| Member's equity | ||
| Member's equity 13,383,394 11,794,510 | ||
| Due from Parent (9,281,090) (7,516,278) | ||
| Total Member's equity 4,102,304 4,278,232 | ||
| Total Liabilities and Member's equity $ 5,729,216 $ 5,806,898 |
Source: Item 23 — RECEIPTS (FDD pages 52–222)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the operating lease liability is divided into current and long-term liabilities. The current operating lease liability decreased from $57,206 on December 31, 2023, to $55,093 on December 31, 2024. The long-term operating lease liability decreased from $172,276 on December 31, 2023, to $117,183 on December 31, 2024.
For a prospective Bath Tune Up franchisee, understanding these lease liabilities is crucial. Operating leases typically involve renting property or equipment needed to run the business. The current portion represents payments due within the next year, while the long-term portion covers payments due beyond that period. A decrease in these liabilities year-over-year could indicate that Bath Tune Up has either renegotiated lease terms, paid down a portion of their lease obligations, or moved to locations or equipment with lower lease costs.
It's important to note that these figures reflect Bath Tune Up's corporate financial obligations and may not directly translate to the individual franchisee's experience. Franchisees will likely have their own lease agreements for their specific locations, which will vary depending on factors such as location, size, and lease terms negotiated. Prospective franchisees should carefully review their own lease agreements and consider these obligations when assessing the overall financial viability of the franchise.
To gain a clearer picture, prospective Bath Tune Up franchisees should ask the franchisor about the typical lease terms and costs experienced by existing franchisees. Understanding the factors that influence lease liabilities and how these costs impact profitability is essential for making an informed investment decision.