What was the weighted-average remaining lease term for Carls finance leases as of January 31, 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2024 | 2023 | |
|---|---|---|
| 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 % |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the weighted-average remaining lease term for finance leases as of January 31, 2024, was 12.11 years. The FDD also provides the weighted-average remaining lease term for finance leases as of January 31, 2023, which was 10.19 years.
Understanding the remaining lease term is crucial for prospective franchisees as it indicates the duration for which Carls is obligated to lease agreements for its properties. This information, coupled with the weighted-average discount rate, helps in assessing the financial obligations and potential risks associated with leasing.
Additionally, the FDD specifies the weighted-average discount rate for finance leases as 6.5% for 2024 and 8.1% for 2023. These rates are essential for calculating the present value of lease payments and understanding the cost of financing these leases. Reviewing these figures allows potential franchisees to evaluate the long-term financial commitments related to property leases and make informed decisions about their investment.