What was the non-cash lease expense for Craters & Freighters in 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| 5,413,239 | $ 5,414,139 |
Statements of Cash Flows
| Years Ended December 31, | 2023 | 2022 |
|---|---|---|
| Change in Cash and Cash Equivalents: | ||
| Cash Flows from Operating Activities: | ||
| Net Income | $ 2,633,230 $ | 2,437,747 |
| Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents | ||
| From Operating Income: | ||
| Amortization Expense | 101,989 | 99,763 |
| Depreciation Expense | 26,134 | 21,995 |
| Gain on Sale of Fixed Assets | (15,729) | - |
| Gain on Sale of Marketable Securities | (841) | (3,643 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the non-cash lease expense for the year ending December 31, 2023, was $1,865. This figure is part of the adjustments made to reconcile net income to net cash and cash equivalents from operating income. It reflects expenses related to leases that did not involve an actual cash outlay during that period.
For a prospective Craters & Freighters franchisee, understanding non-cash lease expenses is important for assessing the true cost of leasing. Non-cash expenses, like depreciation of a leased asset or amortization of a lease liability, impact the company's financial statements even though no cash is immediately paid out. This can affect profitability metrics and should be considered when evaluating the overall financial health of the franchise.
Franchisees should pay close attention to how leases are accounted for, as they can significantly influence the perceived financial performance of the business. Reviewing these figures in the context of overall cash flow and profitability will provide a more complete picture of the franchise's financial operations. Consulting with a financial advisor to fully understand the implications of lease accounting is advisable.