What was the operating lease expense charged to Exit's operations as of December 31, 2022?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
Operating lease expense charged to operations including amortization of leasehold improvements totaled $94,117, $106,186, $101,019, at December 31, 2024, 2023, and 2022, respectively. The Company's lease expense is offset by rental income under the sublease agreements. Sublease rental income totaled $51,895, $74,673, and $53,050 for the years ended December 31, 2024, 2023, and 2022, respectively. Expected minimum future sublease rental income under the operating subleases are as follows:
The Company recognized approximately $25,897, $23,625, and $21,546 in operating lease costs during the years ended December 31, 2024, 2023 and 2022, respectively. Operating lease costs were recorded within general and administrative expenses in the Company's Statements of Income (Loss).
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the operating lease expense charged to operations, including amortization of leasehold improvements, totaled $101,019 as of December 31, 2022. This figure reflects the cost of leasing office space, which Exit uses for its operations. It's important to note that this expense is partially offset by rental income that Exit receives from subleasing portions of its leased space to third parties.
For the year ended December 31, 2022, the sublease rental income totaled $53,050. This income helps to reduce the overall financial burden of the lease expense for Exit. The sublease agreements in place during that time included various cancelable and noncancelable leases with different terms and expiration dates. These subleases contribute to Exit's revenue stream and partially offset the operating lease expenses.
In addition to the operating lease expense, Exit also recognized approximately $21,546 in operating lease costs during the year ended December 31, 2022. These costs were recorded within general and administrative expenses in Exit's Statements of Income (Loss). Therefore, the total expense related to operating leases for Exit in 2022 includes both the $101,019 and the $21,546, but is offset by sublease income of $53,050. A prospective franchisee should consider these figures to understand the financial implications of lease obligations and sublease arrangements on Exit's overall financial performance.