What was the total sublease rental income for Exit for the year ended December 31, 2023?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
and expired on December 1, 2022.
A portion of the lease space was subleased to an unrelated third party under a noncancelable lease agreement that began on August 5, 2022, and expired on August 5, 2024.
A portion of the lease space is subleased to an unrelated third party under a noncancelable lease agreement that began on October 1, 2022, and expires on October 1, 2025.
A portion of the lease space is subleased to an unrelated third party under a monthly lease agreement that began on D
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the sublease rental income totaled $74,673 for the year ended December 31, 2023. This income is generated from subleasing portions of Exit's leased space to unrelated third parties under various lease agreements. These agreements can be cancelable or noncancelable and have different start and expiration dates.
For a prospective franchisee, this indicates that Exit actively manages its leased spaces to generate additional income through subleasing. This sublease income offsets the company's operating lease expenses. The operating lease expense charged to operations totaled $106,186 for the year ended December 31, 2023.
It's important to note that the sublease agreements have varying terms, including cancelable and noncancelable leases, which could impact the stability and predictability of this income stream. Additionally, the specific details of these sublease agreements are further disclosed in Note 7 of the financial statements. Understanding the nature and terms of these subleases is crucial for assessing the financial health and stability of Exit.
Therefore, while sublease income contributes to offsetting lease expenses, franchisees should consider the potential risks associated with the variability of sublease agreements and their impact on Exit's overall financial performance. Reviewing Note 7 in the financial statements will provide a more comprehensive understanding of these subleases.