What was the total operating lease cost for Carls in fiscal year 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
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We sublease to others some of our property under finance leases. These assets are recorded as lease receivables and are included in accounts receivable, net and other assets, net in our accompanying Consolidated Balance Sheets. As of January 31, 2024, future minimum lease and sublease rent revenue expected to be received, are as follows:
Finance Leases Operating Leases Subleases Subleases Owned Properties Fiscal: 2025 $ 246 $ 79,579 $ 7,595 2026 245 71,374 8,191 2027 213 61,550 8,202 2028
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total operating lease cost for fiscal year 2023 was $94,640, as detailed in the financial statements. This figure includes both the operating lease cost of $93,249 and the variable lease cost of $1,391. These costs are significant for Carls as they reflect the expenses associated with leasing the properties necessary for restaurant operations.
For a prospective Carls franchisee, understanding the breakdown of lease costs is crucial for financial planning. The operating lease cost typically covers the base rent for the property, while the variable lease cost can fluctuate based on factors such as sales performance or other operational metrics. Therefore, franchisees need to be prepared for potential variations in these costs and factor them into their overall budget.
It's important to note that these figures represent the total operating lease costs for the company as a whole, not necessarily the costs that an individual franchisee might incur. A franchisee's specific lease costs will depend on the location, size, and terms of their individual lease agreement. Reviewing these consolidated figures, in comparison to the costs of other franchises, can provide a baseline when evaluating the potential profitability and financial obligations associated with operating a Carls franchise.