What was the total rent revenue for Carls under ASC 842?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
ore impairments and the tax effects of adjustments noted above.
Company as Lessor
We lease and sublease land and buildings to others, primarily as a result of the refranchising of certain restaurants. Many of these leases provide for fixed payments, while others provide for v
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total rent revenue under ASC 842 was $101,301. This figure is broken down into minimum rent revenue of $94,426 and variable lease payments of $6,875. The document also provides comparative figures using the previous standard, showing a total rent revenue of $104,419, comprised of $95,886 in minimum rent revenue and $8,533 in variable lease payments.
For a prospective Carls franchisee, understanding these figures is crucial as it provides insight into the brand's revenue streams related to rent. The shift to ASC 842, as noted elsewhere in the FDD, represents a change in accounting principles that franchisees should be aware of. The difference between revenue calculated under ASC 842 and the previous standard may impact financial reporting and analysis.
It's important to note that these figures represent Carls's revenue as a lessor, not the rent expenses a franchisee might incur. Franchisees should carefully review their lease agreements and understand how rent is calculated, including any variable components tied to sales or other factors. Consulting with a financial advisor is recommended to fully grasp the implications of these accounting changes and their potential impact on the franchisee's business.