As of December 31, 2023, does Bb.Q Chicken have any finance leases?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Notes to Consolidated Financial Statements December 31, 2023 and 2022
NOTE 9 – LEASE COMMITMENTS
The Company leases certain office space, restaurant site, vehicles and equipment. The Company assessed whether an arrangement qualifies as a lease (conveys the right to control the use of identified asset for a period of time in exchange for consideration) at inception and only reassesses its determination if the terms and conditions of the arrangement are changed. Lease with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized for these leases on a straight-line basis over the lease term.
Certain leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more. The excise of lease renewal options is at the Company's sole discretion.
Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in balance sheets. The Company does not have finance lease as of December 31, 2023.
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, as of December 31, 2023, the company did not have any finance leases. This information is detailed in the notes to the consolidated financial statements.
The absence of finance leases could mean that Bb.Q Chicken primarily utilizes operating leases for its office space, restaurant sites, vehicles, and equipment. Operating leases are typically treated differently on a company's balance sheet compared to finance leases. Bb.Q Chicken records operating leases as right-of-use assets and corresponding liabilities.
For a prospective franchisee, this detail provides insight into how Bb.Q Chicken manages its assets and liabilities. Understanding the lease commitments can be important for assessing the financial health and stability of the franchisor. Franchisees may want to inquire about the terms and conditions of typical leases that Bb.Q Chicken enters into, as these could indirectly affect franchisees if the franchisor's financial stability is impacted by lease obligations.