What was the total operating lease cost for Carls in fiscal year 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
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 $ 77,732 $ 7,595 2026 245 69,733 8,191 2027 213 60,351 8,202 2028 190 52,474 7,853 2029 97 41,874 7,129 Thereafter 202 119,002 45,439 Total future minimum lease and sublease rent revenue 1,193 $ 421,166 $ 84,409 Unearned interest income (229) Present value of leases receivable 964 Less current portion (180) Leases recei
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 2024 was $86,496, while in fiscal year 2023, it was $86,025. The operating lease cost was $85,267 in 2024 and $84,890 in 2023, with variable lease costs of $1,229 and $1,135 for the respective years.
These figures represent the expenses Carls incurred for leasing properties and equipment necessary for its operations. For a prospective franchisee, understanding these costs is crucial as it provides insight into the financial obligations associated with leasing the physical location and any equipment from Carls.
The difference between the operating lease cost and the total operating lease cost is the variable lease cost. Variable lease costs can fluctuate based on factors such as sales performance or other operational metrics. Franchisees should pay close attention to the components of lease costs, as they can significantly impact the profitability of their individual units.
It's important to note that these figures reflect Carls's overall operating lease costs and may not directly translate to the specific lease expenses a new franchisee will face. Individual lease terms can vary based on location, market conditions, and negotiations with landlords. Therefore, prospective franchisees should carefully review the specific lease agreements for their intended locations and consult with financial advisors to fully understand the financial implications.