What was the current portion of Chem Dry's operating lease obligation in 2023?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 23: Receipts]
Note 10 - Leases
The Company is obligated under operating leases primarily for facilities, expiring at various dates through December 2026, taking into consideration lease renewal options and termination provisions. The right-ofuse asset and related lease liability have been calculated using discount rates ranging from 3.25 to 8.50 percent. The weighted-average remaining lease term at December 31, 2023 is 38 months. The weightedaverage discount rate used at December 31, 2023 is 7.79 percent. Some of the leases require the Company to pay taxes, insurance, utilities, and maintenance costs. Total rent expense under these leases was approximately $1,051, $1,103, and $1,176 for the years ended December 31, 2023, 2022, and 2021, respectively. Total cash paid for operating leases, excluding any variable payments, was $1,172 for the year ended December 31, 2023.
Future minimum annual commitments under these operating leases are as follows:
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
Based on the 2024 Chem-Dry Franchise Disclosure Document, the company's obligations under operating leases are detailed in Note 10. These leases primarily cover facilities and expire at various dates through December 2026, considering lease renewal options and termination provisions. As of December 31, 2023, the weighted-average remaining lease term was 38 months, and the weighted-average discount rate used was 7.79 percent.
The total rent expense for these leases amounted to approximately $1,051,000 in 2023, $1,103,000 in 2022, and $1,176,000 in 2021. The total cash paid for operating leases, excluding any variable payments, was $1,172,000 for the year ended December 31, 2023.
However, the excerpt does not specify the exact current portion of the operating lease obligation for 2023. While it provides the total cash paid for operating leases and future minimum annual commitments, it does not break down the current portion (i.e., the amount due within one year) separately. A prospective franchisee should request this specific figure from Chem-Dry to fully understand the company's short-term lease obligations.