What is the present value of the minimum lease payments for Hardees company-operated finance leases?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
7,853 | | | | | | 2029 | 97 | 42,996 | 7,129 | | | | | | Thereafter | 202 | 123,329 | 45,439 | | | | | | Total future minimum lease and sublease rent revenue | 1,193 | $ 432,506 | $ 84,409 | | | | | | Unearned interest income | (229) | | | | | | | | Present value of leases receivable | 964 | | | | | | | | Less current portion | (180) | | | | | | | | Leases receivable, less current portion | $ 784 | | | | | | |
Company as Lessee
The components of lease cost for January 31, 2024 and are as follows:
| Fiscal 2024 | Fiscal 2023 | |
|---|---|---|
| Finance lease cost: | ||
| Amortization of finance lease assets | $ 1,596 | $ 2,432 |
| Interest on finance lease liabilities | 1,572 | 1,302 |
| Variable lease cost | 2 | 173 |
| Total finance lease cost | 3,170 | 3,907 |
| Operating lease cost | 92,340 | 93,249 |
| Variable lease cost | 1,854 | 1,391 |
| Total operating lease cost | 94,194 | 94,640 |
| Total lease cost | $ 97,364 | $ 98,547 |
Minimum lease payments for all leases and
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 the minimum lease payments for company-operated finance leases as of January 31, 2025, is $16,353. This figure represents the discounted value of all future lease payments Hardees expects to make for its company-operated finance leases, taking into account the time value of money.
This amount is calculated by totaling the minimum lease payments due in each fiscal year from 2025 through the 'Thereafter' period, which comes to $24,363. From this total, Hardees deducts $8,010, which represents the amount of interest included in those payments. The remaining $16,353 is the present value. The current portion of these lease payments, amounting to $634, is then subtracted to arrive at the lease obligations less the current portion, which is $15,719.
For a prospective Hardees franchisee, understanding these lease obligations is crucial because it provides insight into the financial commitments Hardees makes for its corporate locations. While franchisees will have their own lease arrangements, this information can help them understand how Hardees manages its lease liabilities and the factors it considers when evaluating lease agreements. Reviewing these figures allows potential franchisees to benchmark their own projected lease expenses against those of the company, aiding in financial planning and risk assessment.