What was the operating lease right-of-use asset value for Face Foundrie in 2022?

According to Face Foundrie's 2025 Franchise Disclosure Document, the operating lease right-of-use asset value for 2022 was $400,209. This figure represents the value of Face Foundrie's right to use leased office space, which is considered an asset on the company's balance sheet. The lease agreement, which began on January 1, 2022, covers office space shared with two related parties.

For a prospective franchisee, understanding the operating lease right-of-use asset is crucial because it reflects Face Foundrie's long-term lease obligations and how they are accounted for in the company's financials. The initial monthly rent payment was $4,629, escalating by 2% annually. The total monthly lease payment shared among the three entities was $13,888 in 2022, also escalating 2% each year, with Face Foundrie responsible for one-third of the total payment.

The right-of-use asset and related lease liabilities are calculated based on the present value of lease payments over the lease term, using an incremental borrowing rate of 7% to determine this present value. This accounting treatment, in accordance with ASC 842, provides transparency into Face Foundrie's lease commitments and their impact on the company's financial position. Franchisees should be aware of how these lease obligations are managed, as they can affect the overall financial health and stability of the franchisor.