What was the weighted-average remaining lease term for C12 Group at the end of 2023?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Atlanta entity to a franchisee in January 2023. The note is due to be collected through monthly principal payments of $9,640 through January 2025. The note has a balance of $133,107 at December 31, 2023.
NOTE C – OPERATING LEASES
The Company has operating leases for certain office space and equipment. Rent expense under such leases totaled approximately $134,000 in 2023 and $124,000 in 2022 under such leases.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, at the end of 2023, the weighted-average remaining lease term was 1.16 years. This figure reflects the average time left on the company's operating leases for office space and equipment. The FDD also notes that the weighted-average discount rate was 1.08% at the end of 2023.
This information is relevant for prospective C12 Group franchisees because it provides insight into the company's lease obligations and financial planning. While franchisees do not directly assume these leases, understanding the franchisor's financial commitments can offer a broader view of the company's financial health and stability. The FDD also mentions that rent expense under these leases totaled approximately $134,000 in 2023.
It's important to note that these leases do not contain options to renew, and the company recognizes operating lease expenses in operating expenses, specifically office expenses. The company determines if an arrangement is an operating or financing lease at commencement. For all other leases, lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the term of the lease. C12 Group utilizes the risk-free discount rate, according to their elected policy.