What was the weighted-average discount rate for C12 Group's operating leases in 2024?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
ntive is forfeited.
The accrual for the LTIP is updated annually based on the Company's valuation. As of December 31, 2024, the balance accrued under the LTIP was $222,768.
NOTE D – OPERATING LEASES
The Company has operating leases for certain office space and equipment expiring in 2025 and 2029. The leases do not contain options to renew. Operating lease expense is recognized in operating expenses, office expenses. Rent expense under such leases totaled approximately $138,000 in 20
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the weighted-average discount rate for its operating leases was 2.62% in 2024. This figure is used in the calculation of lease liabilities and assets on the company's balance sheet. It reflects the average rate used to discount future lease payments to their present value.
For a prospective C12 Group franchisee, understanding the discount rate applied to operating leases can provide insight into the company's financial practices and lease obligations. Operating leases are for office space and equipment, and the total rent expense for these leases was approximately $138,000 in 2024. The weighted-average remaining lease term was 2.15 years in 2024.
The discount rate is a critical component in determining the present value of future lease payments, which directly impacts the reported lease liabilities and assets on C12 Group's balance sheet. A higher discount rate would result in a lower present value of lease liabilities, and vice versa. The company uses the risk-free discount rate according to its elected policy.
It's worth noting that the discount rate can fluctuate from year to year, as evidenced by the fact that the weighted-average discount rate was 1.08% in 2023. This change could be due to various factors, including changes in market interest rates or the company's perceived credit risk. Reviewing these rates over time can provide a more comprehensive understanding of C12 Group's leasing practices and financial health.