For Hardees finance leases, what was the total present value of minimum lease payments for company-operated locations as of January 31, 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Thereafter | 2,741 | | 98,112 | 38,093 | | | Total future minimum lease and sublease rent revenue | 4,285 | $ | 392,246 | $ 74,254 | | | Unearned interest income | (1,315) | | | | | | Present value of leases receivable | 2,970 | | | | | | Less current portion | (217) | | | | | | Leases receivable, less current portion | $ 2,753 | | | | |
Company as Lessee
The components of lease cost for January 31, 2025 and are as follows:
| Fiscal 2025 | Fiscal 2024 | |
|---|---|---|
| Finance lease cost: | ||
| Amortization of finance lease assets | $ 1,339 | $ 1,596 |
| Interest on finance lease liabilities | 1,670 | 1,572 |
| Variable lease cost | 9 | 2 |
| Total finance lease cost | 3,018 | 3,170 |
| Operating lease cost | 88,491 | 92,340 |
| Variable lease cost | 1,593 | 1,854 |
| Total operating lease cost | 90,084 | 94,194 |
| Total lease cost | $ 93,102 | $ 97,364 |
Minimum lease payments for all leases and the present value of minimum lease payments for operating and finance leases as of January 31, 2025 are as follows:
| Finance Leases | Operating Leases |
|---|
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, the present value of minimum lease payments for finance leases at company-operated locations as of January 31, 2024, was $15,712. This figure represents the discounted value of all future lease payments Hardees expects to make on its finance leases, specifically for locations the company itself operates, not franchised locations. The calculation takes into account the interest portion of the lease payments, which is subtracted to arrive at the present value.
This information is crucial for prospective franchisees as it provides insight into Hardees' financial obligations and how the company manages its lease liabilities. Finance leases are typically used for long-term assets, such as real estate or equipment, and this data point offers a glimpse into the scale of Hardees' investments in its company-operated infrastructure. Understanding the present value helps in assessing the true cost of these leases, considering the time value of money.
Furthermore, the FDD provides a breakdown of lease obligations by fiscal year, allowing for a more detailed analysis of Hardees' future financial commitments. The document also differentiates between finance leases and operating leases, offering a comprehensive view of the company's leasing strategy. Reviewing these figures can help a potential franchisee understand the financial health and stability of Hardees, as well as its approach to managing long-term assets and liabilities.