What was the weighted average discount rate for Benjamin Franklin Plumbing's operating leases in 2023?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
| Classification | 2024 | 2023 | ||
|---|---|---|---|---|
| Assets | ||||
| Operating leases | Operating lease right-of-use assets | $ | 13,787 | $ 15,144 |
| Finance leases | Property and equipment, net | 14,005 | 14,392 | |
| Total leased assets | $ | 27,792 | $ 29,536 | |
| Liabilities | ||||
| Current portion: | ||||
| Operating leases | Operating lease liabilities, current portion | $ | 4,193 | $ 5,070 |
| Finance leases | Accrued and other liabilities | 4,352 | 4,941 | |
| Non-current portion: | ||||
| Operating leases | Operating lease liabilities, non-current portion | 10,396 | 11,077 | |
| Finance leases | Other long-term liabilities | 8,351 | 8,410 | |
| Total lease liabilities | $ | 27,292 | $ 29,498 | |
| Weighted average remaining lease | ||||
| Term (in years): | ||||
| Operating leases | 4.42 | 5.02 | ||
| Finance leases | 3.41 | 3.81 | ||
| Weighted average discount rate: | ||||
| Operating leases | 2.86% | 2.49% | ||
| Finance leases | 6.38% | 6.70% |
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to Benjamin Franklin Plumbing's 2025 Franchise Disclosure Document, the weighted average discount rate for operating leases in 2023 was 2.49%. This rate reflects the average interest rate used to discount future lease payments to their present value, providing a measure of the cost of leasing for Benjamin Franklin Plumbing.
For a prospective franchisee, understanding the discount rate is crucial as it impacts the financial evaluation of lease obligations. A lower discount rate, such as the 2.49% reported for 2023, generally increases the present value of lease liabilities, reflecting a potentially higher cost of leasing. This information is essential for franchisees to accurately assess their financial commitments related to leased assets and liabilities.
It's important to note that this rate is a weighted average, meaning it takes into account the different lease terms and amounts. Franchisees should consider this rate in conjunction with other financial metrics to gain a comprehensive understanding of their leasing obligations and overall financial health. Reviewing these figures allows potential franchisees to forecast expenses and manage their finances effectively within the Benjamin Franklin Plumbing franchise system.