What is the expiration year for the noncancellable operating lease agreements that Bath Tune Up entered into?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
ompany. The total rent expense incurred by the Parent was $2,008,423 for the year ended December 31, 2022, of which $207,650 was allocated to the Company and is included in operating and administrative expenses on the accompanying statement of earnings. In addition, the Company entered into two lease agreements in May 2022 for an office and storage building located in Aberdeen, South Dakota. The Company leases real estate under noncancellable operating lease agreements that expire at various dates through 2027. See Note 2 for a summary of the Company's policies relating to leases. The initial terms of operating leases are five years and certain leases provide for free rent periods, periodic rent increases, and renewal options. Monthly payments for these leases range from $700 to $4,774.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to the 2025 Bath Tune Up FDD, the company entered into two lease agreements in May 2022 for an office and storage building located in Aberdeen, South Dakota. These are noncancellable operating lease agreements that expire at various dates through 2027.
For a Bath Tune Up franchisee, this means that Bath Tune Up has committed to these leases through 2027. The initial terms of the operating leases are five years, and some leases include free rent periods, periodic rent increases, and renewal options. Monthly payments for these leases range from $700 to $4,774.
These lease agreements generally require Bath Tune Up to cover maintenance, repairs, property taxes, and insurance costs, which are variable amounts based on actual costs incurred during each period. The total rent expense for Bath Tune Up was $352,978 for 2022. This indicates the financial obligations Bath Tune Up has committed to regarding real estate, which provides insight into the company's financial planning and stability.