Where are the operating and variable lease costs associated with Bojangles restaurant locations included in the accompanying statements of income?

According to Bojangles's 2025 Franchise Disclosure Document, operating and variable lease costs for Bojangles restaurant locations are specifically included in two areas within the company's financial statements. These costs are allocated to 'Company-operated restaurant operating costs' and 'costs associated with properties and equipment rentals' in the accompanying statements of income. This means that when Bojangles reports its financial performance, the expenses related to leasing restaurant locations are categorized under these two line items.

This accounting practice provides transparency into how Bojangles manages its lease expenses for company-operated restaurants. By including these costs in the specified categories, potential investors and franchisees can better understand the financial impact of leasing on the company's operations. It also allows for a clearer distinction between the costs of operating the restaurants themselves and the costs associated with the physical properties and equipment used in those restaurants.

For a prospective franchisee, understanding where these costs are allocated is crucial for interpreting Bojangles's financial statements. It provides insight into the overall cost structure of operating a Bojangles restaurant and helps in assessing the profitability and financial health of the company. Franchisees can use this information to benchmark their own performance against company-operated stores and to better understand the factors that influence their own lease expenses.

It is important to note that the FDD also mentions that operating and variable lease costs for all other leases are included in general and administrative expenses in the accompanying consolidated statements of operations. This distinction highlights that lease costs are treated differently depending on whether they are directly related to company-operated restaurant locations or other types of leases.