How does Bw Premier Collection determine if a contract is considered a lease?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company primarily leases office space, vehicles, and office equipment from third parties. The Company determines if a contract is a lease at inception. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The lease term begins on the commencement date, which is the date the Company takes possession of the asset and may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Certain of the Company's leases contain renewal options for varying periods, which can be exercised at the Company's sole discretion. Leases are classified as operating or finance leases based on factors such as the lease term, lease payments, and the economic life, fair value and estimated residual value of the asset. Where leases include options to purchase the leased asset at the end of the lease term, this is assessed as a part of the Company's lease classification determination.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company determines if a contract contains a lease at the contract's inception. A contract is considered a lease if it conveys the right to control the use of an identified asset for a specific period in exchange for consideration.
The lease term for Bw Premier Collection begins on the commencement date, which is when the company takes possession of the asset. The lease term may include options to extend or terminate the lease if it is reasonably certain that the option will be exercised. The company's leases may contain renewal options for varying periods, which can be exercised at the company's discretion.
Bw Premier Collection classifies leases as either operating or finance leases based on factors such as the lease term, lease payments, the economic life, the fair value, and the estimated residual value of the asset. If the leases include options to purchase the leased asset at the end of the lease term, this is assessed as part of the company's lease classification determination.