How is lease expense recognized on Body Brain Center's financial statements?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company leases its operating facility under non-cancellable operating lease. The Company also has the right to use the permitted portion of the premises of Body & Brain Yoga and Health Centers, Inc. (BBYHC), subject to the terms and provisions under a premises use agreement.
The Company has a premises use agreement with Body & Brain Yoga and Health Centers, Inc. The term of this agreement shall be month-to-month or until terminated as provided under this agreement. Under the terms of this agreement, the Company has the right to use the permitted portion of the premises, subject to the terms and provisions. Rent expense under the agreement amounted to $9,600 and $9,600 for the years ended December 31, 2024 and 2023, respectively.
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, the company leases its operating facility under a non-cancellable operating lease. Additionally, Body Brain Center has a premises use agreement with Body & Brain Yoga and Health Centers, Inc., allowing them to use a permitted portion of their premises. This agreement is on a month-to-month basis.
For the years ending December 31, 2024 and 2023, the rent expense under the premises use agreement with Body & Brain Yoga and Health Centers, Inc. amounted to $9,600 for each year. This indicates a consistent cost for the use of the premises during those periods.
Prospective franchisees should note that while Body Brain Center has a standard operating lease, they also utilize a related-party premise use agreement. Understanding the terms of both agreements is crucial for forecasting expenses. It's also important to note that the premise use agreement is month-to-month, which could introduce variability in the future if terms change.