What was the total amount of finance lease assets for Bojangles as of December 31, 2023?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
-----|----|----------------------|--|--| | Less: Accumulated amortization | | (9,072) | | (7,539) | | | | Franchise rights, net | $ | 36,928 | $ | 38,461 | | |
Amortization expense related to franchise rights was $1,533, $1,533 and $1,534 for the years ended December 29, 2024, December 31, 2023 and December 25, 2022, respectively, a
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles' 2025 Franchise Disclosure Document, the total amount of finance lease assets as of December 31, 2023, was $2,514. This figure represents the value of assets Bojangles leases under financing arrangements, which are essentially treated as if Bojangles owns them for accounting purposes. These assets are included in the property and equipment, net, and are recorded net of accumulated amortization.
For a prospective franchisee, understanding finance lease assets is crucial because it reflects the company's investment in long-term assets through leasing rather than direct purchase. This can impact the franchisee's financial obligations and the overall financial health of the company. The finance lease assets are subject to amortization, which is the process of gradually writing off the initial cost of an asset.
It's important to note that the finance lease assets are recorded net of accumulated amortization, meaning the reported value has already been reduced to account for depreciation over time. As of December 31, 2023, the accumulated amortization for finance lease assets was $2,086. This indicates the total reduction in value of these assets since they were originally acquired.
Franchisees should consider these figures in the context of Bojangles' overall financial strategy and capital expenditure plans. Understanding the nature and extent of finance leases can provide insights into how Bojangles manages its assets and liabilities, and how this might affect the financial stability and growth prospects of the franchise system.