What was the operating lease liability change for Craters & Freighters in 2022?
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) |
| Bad Debt Expense | 10,000 | 24,928 |
| Non-Cash Lease Expense | 1,865 | 83,132 |
| Unrealized Holding (Gain) Loss on Marketable Securities | (97,174) | 69,301 |
| Reinvested Dividends | (13,827) | (13,279) |
| (Increase) Decrease in Assets: | ||
| Accounts Receivable | 138,330 | (159,098) |
| Prepaid Expenses and Deposits | (166,615) | 462 |
| (Decrease) Increase in Liabilities: | ||
| Accounts Payable | (179,894) | 225,116 |
| Accrued Bonus | (132,340) | 132,340 |
| Accrued Liabilities and Payables | 1,332 | (3,152) |
| Operating Lease Liability Change | - | (70,918) |
| Net Cash Flows from Operating Activities | 2,306,460 | 2,844,694 |
| Cash Flows from Investing Activities: | ||
| Investment in Software Development | (113,648) | (106,716) |
| Proceeds from Sale of Investments | 77,025 | 77,160 |
| Purchase of Investments | (71,427) | (71,880) |
| Due from Related Party | (163,077) | (16,876) |
| Note Receivable | (100,000) | (60,000) |
| Purchase of Property and Equipment | (89,688) | - |
| Net Cash Flows from Investing Activities | (460,815) | (178,312) |
| Cash Flows from Financing Activities: | ||
| Distributions to Shareholder | - | (4,945,919) |
| Due to Shareholder | 2,769,688 | - |
| Net Cash Flows from Financing Activities | 2,769,688 | (4,945,919) |
| Net Increase (Decrease) in Cash and Cash Equivalents | 4,615,333 | (2,279,537) |
| Cash and Cash Equivalents at Beginning of Year | 2,376,316 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the operating lease liability change in 2022 was a decrease of $70,918. This figure is part of the adjustments to reconcile net income to net cash and cash equivalents from operating income.
This decrease in operating lease liability suggests that Craters & Freighters reduced its financial obligations related to leased assets during that year. For a prospective franchisee, understanding these lease-related expenses is crucial, as it reflects the company's approach to managing its assets and liabilities. It's important to note that these figures reflect the financial activities of the franchisor, Craters & Freighters Franchise Company, and not necessarily the performance of individual franchise units.
Reviewing these financial statements provides insight into how Craters & Freighters manages its lease obligations, which can be a significant factor in its overall financial health. Franchisees should consider these trends as part of their due diligence, keeping in mind that their own lease obligations will depend on the specific terms they negotiate for their individual locations.