What was the total lease cost for Craters & Freighters as of December 31, 2023?
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 for the years ended December 31, 2023 | ||
| and 2022, is as follows: | ||
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 FDD, Craters & Freighters' total lease costs as of December 31, 2023, amounted to $94,143. This figure is comprised of two components: operating lease costs of $59,437 and variable lease costs of $34,706. The remaining lease term at that time was 1.75 years, with a discount rate of 1.04%.
These lease costs reflect the expenses Craters & Freighters incurred for leasing office space from a third party. The FDD notes that the option to renew the lease is at the lessor's discretion, and Craters & Freighters has not included a renewal option in their calculations of assets and liabilities because renewal is not reasonably certain. This means that the company's financial statements only account for the current lease term, not any potential extensions.
Prospective franchisees should understand how these lease costs impact the overall financial health of Craters & Freighters. While this data reflects the franchisor's costs, it provides insight into typical lease terms and expenses that a franchisee might encounter when securing their own business location. Understanding the components of these costs (operating vs. variable) can help franchisees better budget and manage their own expenses. Note that the cash paid for amounts included in the measurement of lease liabilities for the year ended December 31, 2023 was $75,513.