What was the operating lease expense for Buildingstars for the year ended December 31, 2024?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
, | | | 2025 | $ 89,928 | | 2026 | 89,928 | | 2027 | 89,928 | | 2028 | 89,928 | | 2029 | 85,414 | | Thereafter | 157,119 $ 602,245 |
NOTE 4 — LEASES
The Company leases certain office space and equipment from third parties and a related party. The Company leases vehicles under finance leases.
The components of lease costs are as follows:
| Year Ended December 31, | |||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | |||
| Operating lease expense | $ 227,314 | $ | 185,279 | $ | 175,866 |
| Related party lease expense | 179,596 | 257,551 | 257,551 | ||
| Short term lease expense | 338,845 | 267,705 | 261,931 | ||
| Finance lease expense: | |||||
| Amortization of right-of-use assets | 366,870 |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 34–43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the operating lease expense for the year ended December 31, 2024, was $227,314. This figure represents the cost Buildingstars incurred for leases of assets that are not classified as finance leases. These are typically shorter-term leases or leases where Buildingstars does not assume the risks and rewards of ownership.
In addition to the general operating lease expense, Buildingstars also specifies related party lease expenses. For the year 2024, this amounted to $179,596. Related party leases are those Buildingstars has with entities that have common ownership, such as Facility Brands Facility, Inc. (FBF), which owns office buildings and leases them to Buildingstars.
Prospective franchisees should consider these lease expenses as part of Buildingstars' overall financial health and stability. Understanding the nature and terms of these leases, especially those with related parties, can provide insights into the company's financial obligations and potential conflicts of interest. It's also worth noting that Buildingstars' FDD includes details on short-term leases and finance leases, offering a comprehensive view of their leasing activities.