What is the total amount representing interest deducted from the total minimum lease payments for Carls franchise & other operations?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| Company- Operated | F | ranchise & Other | Company- Operated | F | ranchise & Other | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fiscal: | П | ||||||||||||||
| 2024 | $ 731 | $ | 1,741 | $ | 15,015 | $ | 70,400 | ||||||||
| 2025 | 681 | 1,553 | 13,850 | 59,897 | |||||||||||
| 2026 | 716 | 1,480 | 12,586 | 50,292 | |||||||||||
| 2027 | 733 | 1,412 | 11,655 | 41,071 | |||||||||||
| 2028 | 737 | 1,356 | 10,497 | 32,560 | |||||||||||
| Thereafter | 6,212 | 6,395 | 55,564 | 87,809 | |||||||||||
| Total minimum lease payments | 9,810 | 13,937 | 119,167 | 342,029 | |||||||||||
| Less amount representing interest | (3,812) | - | (4,239) | (12,207) | (22,470) | ||||||||||
| Present value of minimum lease payments | 5,998 | 9,698 | 106,960 | 319,559 | |||||||||||
| Less current portion | (268) | (1,000) | (13,088) | (63,154) | |||||||||||
| Lease obligations, less current portion. | $ 5,730 | $ | 8,698 | $ | 93,872 | $ | 256,405 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total amount representing interest deducted from the total minimum lease payments for franchise and other operations is $4,239 for finance leases and $25,738 for operating leases. These deductions reflect the interest portion embedded within the total minimum lease payments, allowing Carls to present the present value of the lease obligations more accurately.
For a prospective Carls franchisee, understanding these figures is crucial for assessing the true cost of lease commitments. The deduction of interest provides a clearer picture of the actual asset value being leased, as opposed to the total payments which include financing costs. This distinction is important for financial planning and evaluating the profitability of a franchise location.
It's important to note that these figures are as of January 31, 2024, and may vary in future financial statements. Additionally, these deductions are specific to 'franchise & other' operations, and separate figures are provided for company-operated locations. Franchisees should consult with financial advisors to fully understand the implications of lease obligations and interest deductions on their investment.