What was the value of the operating lease right-of-use assets for the C12 Group in 2022?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
cial statements of which an unmodified opinion was expressed on those financial statements.
Schriver, Carmona & Company, PLLC
San Antonio, Texas March 15, 2023
Consolidated Balance Sheets December 31, 2022 and 2021
| Assets | 2022 | 2021 |
|---|---|---|
| Current Assets: Cash and Cash Equivalents Restricted Cash Accounts Receivable Supplies Inventory and Other Assets | $ 1,015,305 918,064 535,847 219,560 | $ 557,712 122,954 450,982 155,640 |
| Total Current Assets | 2,688,776 | 1,287,288 |
| Website and Computer Equipment | 459,381 | 356,713 |
| Office Furniture and Equipment | 76,140 | 76,140 |
| Less: Accumulated Depreciation | (184,256) | (104,887) |
| Property and Equipment, Net of Accumulated Depreciation | 351,265 | 327,966 |
| Other Assets |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the value of the operating lease right-of-use assets in 2022 was $303,466. This figure represents the company's capitalized lease assets, which are recognized at the lease commencement date based on the present value of lease payments over the lease term.
For a prospective C12 Group franchisee, understanding the operating lease right-of-use assets is crucial because it reflects the company's financial obligations related to leased properties or equipment. This asset represents the value of the company's right to use an asset for a specified period. The value is determined by considering fixed and variable payment terms, prepayments, incentives, and options to extend, terminate, or purchase the lease.
The FDD also provides additional context regarding leases. Operating leases with terms greater than 12 months are recognized as lease assets and obligations. The company has elected not to separate lease and non-lease components and utilizes the risk-free discount rate for this class of assets. Operating lease expense is recognized in operating expenses on a straight-line basis over the lease term.
It's important to note that changes in the operating lease right-of-use asset can impact the cash flow from operating activities. For example, the FDD shows an increase of $124,177 in the operating lease right-of-use asset in 2022. Prospective franchisees should review these figures carefully to understand the company's leasing strategy and its impact on the overall financial health of C12 Group.