What is Crave Cookies' policy regarding leases with an initial term of 12 months or less?

According to Crave Cookies' 2025 Franchise Disclosure Document, the company has elected not to record leases with an initial term of 12 months or less on their balance sheets. Instead, Crave Cookies recognizes the lease expense associated with these short-term leases on a straight-line basis over the lease term.

For a prospective Crave Cookies franchisee, this accounting policy means that if they enter into a short-term lease (12 months or less) for equipment or property, the financial impact will be recognized as an expense evenly distributed over the lease term. This can simplify the franchisee's accounting for these leases, as they do not need to account for the asset and liability on their balance sheet.

This approach is common for short-term leases in many industries, as it reduces the complexity of financial reporting for assets with a limited lifespan or usage period. Franchisees should ensure they understand the terms of any lease agreement and how it will impact their financial statements, particularly regarding the recognition of lease expenses.