With whom did Bens Soft Pretzels enter into a lease agreement in 2022?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
nding December 31:
| 2025 | $ 3,000 |
|---|---|
| 2026 | 3,000 |
| 2027 | 3,000 |
| 2028 | 3,000 $ 12,000 |
NOTE 9 – OPERATING LEASE
During 2022, the Company entered into a lease agreement with Live Large Distribution, Inc. to sublease a portion of a building rented in Elkhart, Indiana for a period of one year. The agreement required monthly payments of $1,000 and contained two one-year renewal options. The Company informed Live Large Distribution, Inc. that it would not renew the lease for 2023 due to the purchase of a building. The two parties agreed to a month-to-month agreement for 2023 until the Company closed on its building. The Company only paid 4 months of rent in 2023.
Rent expense under these agreements for the years ended December 31, 2024, 2023, and 2022 totaled $0, $4,000, and 12,000, respectively.
The Company has elected to apply the short-term lease exception to all leases
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, in 2022, Ben's Soft Pretzels entered into a lease agreement with Live Large Distribution, Inc. The lease was for a portion of a building in Elkhart, Indiana, and was structured as a sublease. The initial term of the lease was one year, with monthly payments of $1,000. The lease agreement also included two one-year renewal options.
Ben's Soft Pretzels chose not to renew the lease with Live Large Distribution, Inc. for 2023 because they purchased a building. Instead, they transitioned to a month-to-month agreement with Live Large Distribution, Inc. until the building purchase was finalized. Ben's Soft Pretzels only paid four months of rent in 2023.
The total rent expense under this agreement was $12,000 in 2022, $4,000 in 2023, and $0 in 2024. Ben's Soft Pretzels applied the short-term lease exception to this lease, which is applicable to leases with a term of one year or less. This means the lease was treated as a short-term lease for accounting purposes.