What was the increase/decrease in lease liabilities for Bb.Q Chicken in 2023?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Notes to Consolidated Financial Statements December 31, 2024 and 2023
NOTE 10 – 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. The lease asset and liability were calculated utilizing the risk-free discount rate according to the Company's elected policy. 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, 2024.
Maturities of lease liabilities
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
Based on the 2025 Bb.Q Chicken Franchise Disclosure Document, Note 9 and Note 10 detail the lease commitments and policies of the company. Note 10 states that the company leases certain office space, restaurant sites, vehicles, and equipment. The company determines whether an arrangement qualifies as a lease at the start and reassesses if the terms change. Leases with initial terms of 12 months or less are not recorded on the balance sheet, and lease expenses for these are recognized on a straight-line basis. Certain leases may include renewal options that can extend the lease term from one to 10 years or more, exercised at the company's discretion. Operating leases are included as right-of-use assets, other current liabilities, and operating lease liabilities on the balance sheets, while finance leases are included in property and equipment, other current liabilities, and other long-term liabilities. The company did not have any finance leases as of December 31, 2024.
However, the provided excerpts from the 2025 FDD do not contain the specific figures needed to calculate the increase or decrease in lease liabilities for Bb.Q Chicken in 2023. Note 9 from the 2023 and 2022 financial statements discusses the company's lease commitments and policies, but it does not provide the actual liability values for those years. Note 10 from the 2024 and 2023 financial statements also discusses lease commitments but does not provide the specific figures needed to calculate the change in lease liabilities.
To determine the change in lease liabilities for Bb.Q Chicken in 2023, a prospective franchisee should request the full financial statements from the franchisor. These statements should include the balance sheets for 2022 and 2023, which will list the lease liabilities for each year. With these figures, the franchisee can calculate the exact increase or decrease in lease liabilities during 2023.