What was the total rent expense for Bath Tune Up in 2022?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| $ 184,144 | |
|---|---|
| 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, periodic rent increases, and renewal options. Monthly payments for these leases range from $700 to $4,774. All lease agreements generally require the Company to pay maintenance, repairs, prope
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 51–52)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the total rent expense for the company in 2022 was $352,978. This figure includes rent expenses directly incurred by Bath Tune Up, as well as a portion of the rent expense allocated to it by its Parent company, HFC KTU LLC, for the headquarters and training center. The parent company's total rent expense was $2,008,423, of which $207,650 was allocated to Bath Tune Up.
In May 2022, Bath Tune Up entered into two lease agreements for an office and storage building in Aberdeen, South Dakota. These leases are noncancellable operating leases that expire at various dates through 2027, with monthly payments ranging from $700 to $4,774. The 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.
For a prospective franchisee, understanding these rent expenses is crucial. While the $352,978 represents the total rent expense for the entire company, individual franchisees will need to factor in their own rent and related expenses for their specific locations. The FDD indicates that lease expenses are recognized on a straight-line basis over the lease term and are included in operating and administrative expenses on the Statements of Operations. Franchisees should carefully consider the lease terms, including potential rent increases and additional costs for maintenance and insurance, when projecting their own operating expenses.