What was the reported value of Chesters' operating lease right-of-use assets, net, in 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
mingham, Alabama April 4, 2024
CHESTER'S INTERNATIONAL, LLC BALANCE SHEETS DECEMBER 31, 2023 AND 2022
| ASSETS | ||
|---|---|---|
| 2023 | 2022 | |
| CURRENT ASSETS | ||
| Cash | $ 2,515,674 | $ 2,392,340 |
| Accounts receivable, net of allowance for | ||
| doubtful accounts | 5,299,346 | 3,735,366 |
| Due from related parties | 1,117,539 | 684,044 |
| Inventories, net | 1,247,308 | 1,130,712 |
| Prepaid expenses | 49,815 | 101,200 |
| Total current assets | 10,229,682 | 8,043,662 |
| PROPERTY AND EQUIPMENT, NET | 878,650 | 148,788 |
| OPERATING LEASE RIGHT-OF-USE ASSETS, NET | 1,820,812 | 1,304,672 |
| GOODWILL, NET | 1,613,657 | 1,936,388 |
| INTANGIBLE ASSETS, NET | 30,523 | 52,666 |
| TOTAL ASSETS | $ 14,573,324 | $ 11,486,176 |
| LIABILITIES AND MEMBERS' EQUITY | ||
| CURRENT LIABILITIES | ||
| Current m |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters' 2025 Franchise Disclosure Document, the reported value of their operating lease right-of-use assets, net, was $1,820,812 as of December 31, 2023. This figure represents the value of assets that Chesters holds the right to use under operating leases, after accounting for accumulated amortization.
Operating lease right-of-use assets are initially measured as the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. This accounting treatment reflects the company's obligations and rights related to leased properties and equipment. The value of these assets can fluctuate based on factors such as lease terms, renewal options, and changes in lease payments.
For a prospective Chesters franchisee, understanding the valuation and amortization of these assets is important because it provides insight into the company's financial obligations and how they manage their leased assets. Reviewing the complete financial statements and related notes in Exhibit D of the FDD can provide a more comprehensive understanding of Chesters' leasing activities and their impact on the company's financial position.