What is the reported operating lease cost for Expense Reduction Analysts?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
at agreement was $59,642 and $62,511 for the years ended December 31, 2024 and 2023, respectively.
NOTE 7 OPERATING LEASES (CONTINUED)
Qualitative Information concerning the Company's lease for the year ended December 31:
| Operating Lease Cost | $ 63,648 | 65,203 |
|---|---|---|
| Operating Cash Flows from |
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the operating lease cost was $63,648 in 2023 and $65,203 in 2022. This figure represents the cost associated with leasing office space, which Expense Reduction Analysts utilizes under a noncancellable operating lease. The monthly rental amounts were $5,137 and $5,577 as of December 31, 2023, and 2022, respectively. The total rental expense was $62,511 for 2023 and $59,207 for 2022.
For a prospective Expense Reduction Analysts franchisee, understanding these lease costs is crucial as it provides insight into the franchisor's overhead expenses. While franchisees typically do not lease office space directly from Expense Reduction Analysts, this information can be indicative of the franchisor's financial management and stability. Knowing the lease terms and costs helps potential franchisees assess the financial health of the franchisor and understand how they manage their own operational expenses.
The FDD also mentions that Expense Reduction Analysts determines if an arrangement is a lease at inception and includes operating leases in right-of-use assets and lease liability in the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. This accounting treatment is standard under U.S. GAAP and provides a more transparent view of the company's lease obligations.
It's important to note that the weighted average remaining lease term was 2.7 years and 3.7 years, and the weighted average discount rate was 4.82% for both years. These figures are relevant for understanding the long-term lease commitments and the interest rates used to calculate the present value of lease liabilities. This information, combined with the actual lease costs, offers a comprehensive view of Expense Reduction Analysts' leasing strategy and financial obligations related to their office space.