Where are lease expenses recognized in Bath Tune Up's Statements of Operations?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
, and maintenance expenses, are expensed as incurred in Operating and administrative on the Statements of Operations and are not included in lease liabilities on the Balance Sheets.
Lease expenses are recognized on a straight-line basis over the lease term in Operating and administrative on the Statements of Operations.
The Company's lease commitments include real estate and storage leases, and all leases have been determined to be operating leases. Total operating lease expense was $221,958 and $269,869 for the years ended December 31, 2
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, lease expenses are recognized on a straight-line basis over the lease term. These expenses are specifically included in "Operating and administrative" expenses within the Statements of Operations. This accounting treatment applies to both real estate and storage leases, which Bath Tune Up classifies as operating leases.
For the years ending December 31, 2024, and 2023, the total operating lease expense amounted to $221,958 and $269,869, respectively. These figures are incorporated into the "Operating and administrative expenses" line item on the Statements of Operations. Further details regarding these lease commitments can be found in Note 6 – Commitments and Contingencies of the financial statements.
This means that when a prospective Bath Tune Up franchisee reviews the company's financial statements, they can find the total lease expenses as part of the broader "Operating and administrative expenses." Understanding how lease expenses are accounted for is crucial for franchisees to accurately assess the company's financial health and to project their own potential operating costs.