What is the total amount of minimum lease payments for Carls?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Finance Leases | Leases | |||||||
|---|---|---|---|---|---|---|---|---|
| Company- Operated | F | ranchise & Other | Company- Operated | F | ranchise & Other | |||
| Fiscal: | ||||||||
| 2024 | $ | 731 | $ | 1,741 | $ | 15,015 | $ | 78,218 |
| 2025 | 681 | 1,553 | 13,850 | 64,874 | ||||
| 2026 | 716 | 1,480 | 12,586 | 54,294 | ||||
| 2027 | 733 | 1,412 | 11,655 | 44,683 | ||||
| 2028 | 737 | 1,356 | 10,497 | 36,269 | ||||
| Thereafter | 6,212 | 6,395 | 55,564 | 107,464 | ||||
| Total minimum lease payments | 9,810 | 13,937 | 119,167 | 385,802 | ||||
| Less amount representing interest | (3,812) | (4,239) | (12,207) | ( | ||||
| Present value of minimum lease payments | 5,998 | 9,698 | 106,960 | 360,064 | ||||
| Less current portion | (268) | (1,000) | (13,088) | 7 | ||||
| Lease obligations, less current portion | $ | 5,730 | $ | 8,698 | $ | 93,872 | $ | 287,623 |
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 all leases, including finance and operating leases, are detailed as of January 31, 2024. These payments are broken down by fiscal year and categorized by company-operated versus franchise & other locations. For finance leases, the total minimum lease payments are $9,810 for company-operated locations and $13,937 for franchise & other locations. For operating leases, the total minimum lease payments are $119,167 for company-operated locations and $385,802 for franchise & other locations.
These figures represent the total undiscounted amount of lease payments that Carls expects to make over the remaining term of its leases. It's important to note that these totals include payments for leases extending several years into the future, with amounts specified for each fiscal year from 2024 through 2028, as well as an aggregate amount for payments due thereafter. The FDD also provides a breakdown of how these lease obligations are accounted for, including the reduction for amounts representing interest and the present value of the minimum lease payments.
For a prospective Carls franchisee, understanding these lease obligations is crucial because it provides insight into the company's long-term financial commitments related to property usage. While these are Carls's obligations, they reflect the types of lease terms and financial considerations that a franchisee might encounter when securing a location. Reviewing these figures in the FDD can help a potential franchisee anticipate and plan for their own future lease expenses and financial obligations. Note that these figures pertain to existing leases as of the balance sheet date and may not be indicative of current market rates or terms for new leases.
It is important to consider that these numbers reflect lease obligations as of a specific date (January 31, 2024) and can change over time as leases are renewed, renegotiated, or new locations are added. Therefore, while the FDD provides a snapshot of Carls's lease commitments, prospective franchisees should conduct their own due diligence and consult with financial advisors to fully understand the potential lease-related expenses they may incur.