How does Brightstar Care recognize lease expenses for operating leases?

According to Brightstar Care's 2025 Franchise Disclosure Document, the company recognizes lease expenses for operating leases on a straight-line basis over the lease term. This means that the total lease expense is divided evenly over the duration of the lease, providing a consistent expense amount each period. Variable lease payments, however, are expensed in the period in which the obligation for those payments is incurred, meaning these costs are recognized when they actually happen.

Brightstar Care has also elected to combine lease and non-lease components, such as fixed maintenance costs, as a single lease component when calculating right-of-use (ROU) assets and lease liabilities for all classes of leased assets. This simplifies the accounting process by bundling these costs together. Additionally, Brightstar Care has chosen to implement the short-term lease exception policy.

For leases with a term of 12 months or less at the commencement date, Brightstar Care expenses these on a straight-line basis over the lease term. These short-term leases do not result in the recognition of a ROU asset or lease liability. This accounting treatment is typical in the franchise industry, as it provides a straightforward and consistent method for recognizing lease expenses, especially for operating leases.