What was the total lease expense for Itan for the year ended December 31, 2024?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Computers and equipment | $ 25,753 | $ 25,753 |
| Furniture | 18,716 | 18,716 |
| Vehicles | 82,012 | 82,012 |
| 126,481 | 126,481 | |
| Less: accumulated depreciation | ||
| (56,128) | (38,201) | |
| $ 70,353 | $ 88,280 |
Depreciation expense was $17,927 and $443 for the years ended December 31, 2024 and 2023.
NOTE 4 COMMITMENTS
The Company is currently leasing office space from a related party through common ownership (see note 5). The lease commenced on November 1, 2018, and continues as a month-to-month tenancy. Either party may terminate the tenancy by giving written notice at least 30 days prior to the intended termination date. The terms of the monthly payments are reviewed periodically and may be adjusted.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company's lease expense for the year ended December 31, 2024, was $37,022. This figure represents the cost Itan incurred for leasing its office space during that year. In comparison, the lease expense for the previous year, 2023, was $35,933.
The FDD also notes that Itan leases its office space from Evolv Brands, Inc., a related party due to common ownership. The lease agreement is on a month-to-month basis, commencing on November 1, 2018, and can be terminated by either party with 30 days' written notice. The monthly payments, which include rent and common area maintenance, are periodically reviewed and subject to adjustment. The FDD indicates that the monthly payments were approximately $3,133.
Prospective franchisees should be aware of these related-party transactions, as they may influence the company's financial performance and stability. While the lease expense itself may seem relatively stable, the month-to-month nature of the lease agreement introduces a degree of uncertainty, as the terms and monthly payments can be adjusted. It is advisable for potential franchisees to inquire about the long-term outlook for the lease agreement and any potential impacts on Itan's operating expenses.