What was the amount of noncash operating lease expense for Beef O Bradys in 2024?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | ||
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Net loss | $ ( 739,889) | $ ( 880,345) | |
| Adjustments to reconcile net loss to net cash provided by operating | |||
| activities: | |||
| Depreciation | 2,530,034 | 2,734,361 | |
| Provision for credit loss on notes receivable | 10,013 | 20,208 | |
| Amortization of debt issuance costs | 140,170 | 80,078 | |
| Noncash operating lease expense | 3,672,108 | 2,657,350 | |
| Amortization of goodwill and intangible assets | 3,917,404 | 3,535,155 | |
| Loss on store closure | 32,064 | 730,442 | |
| Loss on disposal of long-lived assets | 581,957 | - | |
| Loss on extinguishment of debt | - | 274,775 | |
| Paid-in-kind interest | - | 526,156 | |
| Changes in operating assets and liabilities | |||
| Franchisee receivables | ( 177,276) | 35,787 | |
| Vendor rebate receivable | 4,539 | 32,484 | |
| Other receivables | 46,685 | 192,925 | |
| Inventories | 94,750 | ( 40,771) | |
| Due from related parties | ( 351,267) | 409,686 | |
| Prepaid expense and other current assets | 11,988 | ( 28,158) | |
| Other assets | ( 84,460) | 13,297 | |
| Accounts payable and accrued expenses | ( 372,138) | 827,315 | |
| Deferred revenue | 134,951 | ( 194,892) | |
| Changes in operating leases | ( 3,846,622) | ( 2,634,362) | |
| Net Cash Provided by Operating Activities | 5,605,011 | 8,291,491 | |
| Cash Flows from Investing Activities | |||
| Purchases of property and equipment | ( 2,662,586) | ( 2,022,129) | |
| Proceeds from disposal of property and equipment | 319,252 | - | |
| Acquisition of intangible asset | ( 195,323) | - | |
| Net payments (advances) to note receivables | 79,893 | - | |
| Cash paid for business acquisitions | ( 1,800,000) | ( 1,720,462) | |
| Net Cash Used in Investing Activities | ( 4,258,764) | ( 3,742,591) | |
| Cash Flows from Financing Activities | |||
| Payments made for debt issuance costs | - | ( 700,862) | |
| Distributions to members | ( 2,093,481) | ( 1,000,000) | |
| Proceeds from notes payable to bank | 1,000,000 | 27,913,083 | |
| Payments on notes payable to bank | - | ( 18,782,628) | |
| Payments on notes payable to related parties | - | ( 12,853,731) | |
| Net Cash Used in Financing Activities | ( 1,093,481) | ( 5,424,138) | |
| Net Change in Cash | 252,766 | ( 875,238) | |
| Cash, Beginning of Year | 2,991,709 | 3,866,947 | |
| Cash, End of Year | $ 3,244,475 | $ 2,991,709 | |
| Supplemental Disclosures of Cash Flows Information | |||
| Cash paid during the year for interest | $ 2,584,268 | $ 2,879,965 | |
| Past due franchisee receivables converted to notes | $ 122,310 | $ 45,332 | |
| Right-of-use assets obtained in exchange for lease obligations | |||
| during the year | $ 1,809,042 | $ 1,897,777 | |
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Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the noncash operating lease expense for the year 2024 was $3,672,108. This figure is part of the consolidated financial statements, reflecting the company's overall financial activities, not just those of franchised locations. Noncash expenses like these are accounting adjustments that don't involve the actual exchange of cash but still impact the company's reported earnings.
For a prospective Beef O Bradys franchisee, understanding noncash operating lease expenses is crucial because it provides insight into the company's financial health and how it manages its lease obligations. While franchisees may not directly deal with these specific expenses at the corporate level, they reflect the overall financial strategy and stability of Beef O Bradys, which can affect the support and resources available to franchisees.
It's important to note that this figure is part of a larger set of financial data, including depreciation, amortization, and other adjustments, that reconcile the net loss to the net cash provided by operating activities. Reviewing these figures in totality can provide a more complete picture of Beef O Bradys's financial performance. Franchisees should consider these figures as part of their due diligence to assess the financial strength of the franchisor.