What was the weighted average remaining lease term for Chesters' administrative and warehouse facilities as of December 31, 2023?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company leases its administrative and warehouse facilities under noncancelable operating lease agreements having terms in excess of one year expiring through 2034.
The following summarizes the weighted average remaining lease term and discount rate as of December 31, 2023 and 2022:
| Weighted Average Remaining Lease Term | 9.71 years | 3.86 years |
|---|---|---|
| Weighted Average Discount Rate | 8.32% | 2.32% |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, as of December 31, 2023, the weighted average remaining lease term for Chesters' administrative and warehouse facilities was 9.71 years. The FDD also notes that the company leases these facilities under noncancelable operating lease agreements that have terms exceeding one year and expire through 2034.
This information is relevant for prospective franchisees as it provides insight into the stability and long-term planning of Chesters' corporate operations. Knowing the length of the lease terms for administrative and warehouse facilities can give franchisees confidence that Chesters has secured its operational infrastructure for the foreseeable future. This can be a positive indicator of the franchisor's commitment to supporting its franchise network.
However, it is important to note that these lease terms apply to Chesters' own facilities and not necessarily to the locations that franchisees will lease for their individual restaurants. Franchisees should still conduct their own due diligence to understand the lease terms and conditions for their specific locations, as these can vary significantly and impact the profitability and sustainability of their business.