What was the value of land leased to others by Carls in the earlier of the two reported years?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
----------------|--------------------------|-------------| | Finance leases | 12.11 years | 10.19 years | | Operating leases | 7.67 years 7.89 years | | | Weighted-average discount rate: | | | | | 2024 | 2023 | | Finance leases | 6.5 % | 8.1 % | | Operating leases | 2.4 % | 1.8 % |
NOTE 10 — SALE-LEASEBACK TRANSACTIONS
______________________
We currently have entered into agreements with independent third parties under which we sold and leased back a total of 126 restaurant properties. The initial minimum lease terms are 20 years and include renewal options. The leases also include provisions that provide us with the ability to repurchase the properties, which for accounting purposes, prevents sale recognition as the leased properties are real estate, and we have concluded that no two real estate assets are substantially the same.
Under the financing method, the sales proceeds received are recorded in other current liabilities and other long-term liabi
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the document discusses sale-leaseback transactions but does not specify the value of land leased to others. Instead, it focuses on the net book value of assets associated with properties that Carls has sold and then leased back.
The FDD mentions that the net book value of these assets was $115,805 as of January 31, 2024, and $117,126 as of January 31, 2023. These values reflect the properties Carls continues to be involved with through lease agreements after selling them. The document also notes gains recognized from the termination of lease agreements for certain properties, such as a net gain of $1,160 in fiscal year 2023 related to the write-off of assets and liabilities from terminated leases.
For a prospective franchisee, this information indicates that Carls engages in sale-leaseback transactions as part of its financial strategy. However, the FDD does not provide details on income or value derived from leasing land to other entities. A potential franchisee interested in this aspect of Carls's real estate activities would need to seek clarification from the franchisor directly, as the FDD does not cover this specific topic.