What is the present value of minimum lease payments for Carls company-operated finance leases in 2028?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
ture minimum lease and sublease rent revenue | 1,478 | $ 463,032 | $ | 107,023 | | | | Unearned interest income | (308) | | | | | | | Present value of leases receivable | 1,170 | | | | | | | Less current portion | (206) .; | | | | | | | Leases receivable, less current portion $ | 964 ======== | | | | | | | | | | | | | |
Company as Lessee
The components of lease cost for January 31 , 2023 are as follows:
| Fiscal 2023 | |
|---|---|
| Finance lease cost: | |
| Amortization of finance lease assets | $ 2,432 |
| Interest on finance lease liabilities | 1,302 |
| Variable lease cost | 173 |
| Total finance lease cost | $ 3,907 |
| Operating lease cost | 93,249 |
| Variable lease cost | 1,391 |
| Total operating lease cost | $ 94,640 |
| Total lease cost | $ 98,547 |
Minimum lease payments for all leases and the present value of minimum lease payments for operating and finance leases as of January 31, 2023 are as follows:
| | | Finance Leases | | | | Leases
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the minimum lease payments for company-operated finance leases in 2028 is $737. This represents the present value of the lease payments that Carls expects to make for its company-operated finance leases during that fiscal year.
For a prospective franchisee, understanding these lease obligations is crucial. While this specific figure applies to company-operated stores, it provides insight into the types of lease commitments Carls undertakes. This can help franchisees anticipate potential lease terms and costs they might encounter when securing locations for their own franchised restaurants.
It's important to note that this figure represents only the present value for the year 2028. The total lease obligations extend beyond this single year, as shown in the 'Thereafter' category, and are subject to interest and other factors that affect the overall cost of leasing. Franchisees should consult with financial advisors to fully understand the implications of lease agreements and how they might impact their business's financial health.