What is the present value of the minimum finance lease payments for Caption By Hyatt?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
| Operating leases Year Ending December 31, (1) | Finance leases |
|---|---|
| 2025 $ 41 | $ 2 |
| 2026 37 | 2 |
| 2027 34 | — |
| 2028 34 | — |
| 2029 33 | — |
| Thereafter 174 | — |
| Total minimum lease payments | $ 4 |
| Less: amount representing interest (75) | — |
| Present value of minimum lease payments $ 278 | $ 4 |
Source: Item 23 — Receipts (FDD pages 85–349)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the present value of the minimum finance lease payments is $4. This figure represents the discounted value of all future lease payments, taking into account the time value of money. In other words, it's the lump sum amount that, if invested today at a certain interest rate, would be sufficient to cover all the lease payments as they come due.
The FDD also provides a breakdown of the minimum finance lease payments for the years 2025 and 2026, which are both $2. There are no minimum lease payments for the years 2027, 2028, and 2029. The total minimum lease payments amount to $4. The amount representing interest is $0, which when subtracted from the total minimum lease payments, results in the present value of minimum lease payments being $4.
For a prospective Caption By Hyatt franchisee, understanding the present value of lease payments is crucial for assessing the financial obligations associated with leasing property or equipment. It allows for a more accurate comparison of different leasing options and helps in making informed decisions about capital investments. Franchisees should carefully review the lease terms and consult with financial advisors to fully understand the implications of these lease obligations on their business's financial health.