What was the total lease cost for Craters & Freighters as of December 31, 2022?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
due under the lease contracts include fixed payments.
Information on the operating lease as of and for the years ended December 31, 2023 and 2022, is as follows:
| As of December 31, | 2023 | 2022 |
|---|---|---|
| Lease cost: | ||
| Operating Lease Cost | $ 59,437 $ | 85,687 |
| Variable Lease Costs | 34,706 | 22,146 |
| Total Lease Costs | $ 94,143 | 107,833 |
| Remaining Lease Term | 2.75 Years | 3.75 Years |
| Discount Rate | 1.04 % | 1.04 % |
| Cash paid for amounts included in the measurement of lease liabilities f |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the total lease costs as of December 31, 2022, amounted to $107,833. This figure comprises two components: operating lease costs and variable lease costs. The operating lease cost for that year was $85,687, while the variable lease costs totaled $22,146.
For a prospective Craters & Freighters franchisee, understanding these lease costs is crucial for financial planning. Lease costs can significantly impact the overall profitability of the franchise. The distinction between operating and variable lease costs is also important. Operating lease costs are typically fixed and predictable, while variable lease costs can fluctuate based on factors such as usage or market conditions.
Additionally, the FDD indicates that Craters & Freighters had a remaining lease term of 3.75 years and a discount rate of 1.04% as of December 31, 2022. These details provide further context for assessing the long-term lease obligations and financial health of the company. Franchisees should consider these factors when evaluating the financial stability and potential risks associated with the franchise.
It is also important to note that the cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2022, was $73,473. This figure represents the actual cash outflow related to the lease obligations during that period, which may differ from the total lease costs due to accounting adjustments and amortization schedules.