How does Body Brain Center recognize lease expense for short-term leases?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
th Body & Brain Yoga and Health Centers, Inc. (Provider). Provider is engaged in the business of providing yoga and wellness classes and programs, and is experienced in developing and maintaining online software specifically designed for the yoga and wellness industry. This agreement was for a term of one year and continues until terminated by the mutual consent of the parties. Under the terms of this agreement, the Company pays to Provider $400 per month. D
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 has a premises use agreement with Body & Brain Yoga and Health Centers, Inc. The agreement is structured on a month-to-month basis and continues until terminated. Under the terms of this agreement, Body Brain Center has the right to use a portion of the premises, subject to specific terms and provisions.
The rent expense for Body Brain Center under this agreement amounted to $9,600 for both the years ended December 31, 2024, and December 31, 2023. This indicates a consistent monthly rent expense of $800 ($9,600 / 12 months). The consistent expense suggests that Body Brain Center recognizes the lease expense on a straight-line basis over the term of the agreement, which is typical for short-term leases.
For a prospective franchisee, this means that Body Brain Center's financial statements reflect a consistent and predictable rent expense related to this specific premises use agreement. This arrangement provides Body Brain Center with flexibility, as the lease can be terminated relatively quickly if needed. However, it also means that the company does not have a long-term guarantee on the use of the premises and could be subject to changes in terms or termination of the agreement.