Besides the monthly rent, what other expenses is Carbones Pizzeria responsible for under the operating lease?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
aring.
Notes to Consolidated Financial Statements For the Year Ended October 31, 2024
3. Related Party Transactions (Continued)
Operating Lease
The Company leases a facility from a limited liability company which is owned by the stockholder of the Company (See Note 4).
4. Commitments and Contingencies
Legal
From time to time, the Company is party to legal actions arising out of the ordinary course of business. The Company does not believe that these legal actions will have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, in addition to the monthly rent, the company is responsible for other expenses related to the operating lease. The company's operating lease is a month-to-month agreement with a related party. The monthly rental payments are $8,000.
Under the terms of the operating lease, Carbones Pizzeria is also responsible for paying property taxes, maintenance costs, insurance expenses, and other occupancy expenses related to the leased premises. For the year ending October 31, 2023, the total rent expense for this facility was approximately $82,000.
Prospective franchisees should note that this operating lease is between Carbones Pizzeria and a related party (the stockholder of the company). This arrangement may not directly apply to franchisees, but it provides insight into the types of lease obligations the company faces. Franchisees should carefully review their own lease agreements and understand all associated costs, including rent, property taxes, maintenance, and insurance, as these can significantly impact their operating expenses and profitability.