What is the range of monthly payments for the operating leases that Bath Tune Up has?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
----------------------|---------------| | Accrued accounts payable | 46,267 | | Accrued cost of product sales | 216,671 | | Accrued training costs | 33,694 | | Accrued liabilities | $ 480,776 |
7. Commitments and Contingencies
Operating Leases
The Parent leases the Company's headquarters and training center and allocates a portion of its rent expense to the Company. 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, period
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to the 2025 FDD, Bath Tune Up leases real estate under noncancellable operating lease agreements. These leases expire at various dates through 2027. The monthly payments for these leases range from $700 to $4,774. The initial terms of the operating leases are five years, and some leases include free rent periods, periodic rent increases, and renewal options.
Generally, the lease agreements require Bath Tune Up to cover the costs of maintenance, repairs, property taxes, and insurance. These additional costs are variable and depend on the actual costs incurred during each period.
For a prospective Bath Tune Up franchisee, understanding the terms of these leases is crucial. The monthly lease payments, along with the additional costs for maintenance, repairs, taxes, and insurance, will impact the franchisee's operating expenses and overall profitability. It is important to carefully review the lease agreements and factor in these costs when developing a financial plan.