What was the amount of Exit's operating lease liability arising from recognition of right-of-use asset as of December 31, 2022?

According to Exit's 2025 Franchise Disclosure Document, the operating lease liability arising from the recognition of right-of-use assets as of December 31, 2022, was $428,236. This figure reflects the company's obligation to make lease payments as a result of its right to use an underlying asset, such as office space.

For a prospective Exit franchisee, understanding this figure is crucial because it provides insight into the company's financial obligations related to its leases. The right-of-use asset represents Exit's right to use the leased asset over the lease term, while the lease liability represents the obligation to make lease payments. This accounting treatment, under ASC 842, provides a more transparent view of Exit's lease-related financial commitments.

The disclosure of this liability helps potential franchisees assess Exit's overall financial health and stability. It's important to note that this liability is specific to Exit Realty Upper Midwest and may not directly translate to the financial obligations of individual franchisees. However, it does offer a glimpse into how Exit manages its own lease obligations, which can be a useful point of reference.

It is also important to note that the FDD provides additional context regarding Exit's operating leases in Note 7, including details about the lease agreement for office space in Lakeville, Minnesota, and the terms of the lease, such as monthly rent and build-out incentives. This information, combined with the operating lease liability figure, offers a comprehensive view of Exit's leasing arrangements.