What was the Buildingstars' related party lease expense for the year ended December 31, 2022?
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 |
| Relat |
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 34–43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, the related party lease expense for the year ended December 31, 2022, was $257,551. This figure represents the expenses Buildingstars incurred for leasing properties from parties related to the company. These related parties, like Facility Brands Facility, Inc. (FBF), have common ownership with Buildingstars.
For a prospective franchisee, understanding related party transactions is crucial. It's important to assess whether these lease agreements are conducted at arm's length and reflect fair market value. Related party transactions can sometimes raise concerns about potential conflicts of interest or whether the terms are as favorable as those that could be obtained from independent third parties.
In 2024, Facility Brands Facility, Inc. (FBF) sold the Chicago property, which resulted in the termination of the operating lease as of September 2024. The mortgage notes totaling approximately $1,700,000 are secured by deeds of trust and security interests in substantially all of the Company's assets. Monitoring these relationships and their financial implications is a key aspect of evaluating the overall financial health and stability of Buildingstars.