How is the weighted average discount rate determined for Beard Papas' lease agreements?

Based on the 2025 Beard Papas Franchise Disclosure Document excerpts, there is no information provided regarding how the weighted average discount rate is determined for lease agreements. The excerpts discuss various aspects of the franchise agreement, including site selection, compliance, and definitions of key terms, as well as the franchisor's option to assume or renew the lease under certain conditions. However, the specific methodology for calculating the weighted average discount rate for lease agreements is not addressed.

While the FDD excerpts detail the franchisee's responsibility for site selection and the franchisor's approval process, they do not delve into the financial calculations related to lease terms. The excerpts do mention that for the years ended December 31, 2023 and 2022, the company incurred rent expenses under noncancelable lease agreements of approximately $168,000 and $70,000, respectively. This provides some context on the company's rent expenses but does not explain how the discount rate is determined.

A prospective Beard Papas franchisee should directly ask the franchisor about the process used to determine the weighted average discount rate for lease agreements. Understanding this calculation is crucial for accurately assessing the financial viability of a potential location and making informed decisions about lease negotiations. Specifically, the franchisee should inquire about the factors considered in determining the discount rate and how it impacts the overall cost of leasing a location.