What was the value of Kitchen Solvers' right of use asset - operating leases in 2023?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Assets | 2024 | 2023 | 2022 |
|---|---|---|---|
| Current assets: | |||
| Cash | $ 409,936 | $ 192,541 | $ 60,708 |
| Accounts receivable | 63,672 | 138,673 | 140,562 |
| Accounts receivable - related party | 174,152 | - | - |
| Contract assets - Current | 138,404 | 118,404 | 98,129 |
| Advances receivable | - | - | 74,472 |
| Other receivable | - | - | 3,260 |
| Inventory | 28,642 | 14,106 | - |
| Prepaid expenses | 2,277 | 2,293 | - |
| Total current assets | 817,083 | 466,017 | 377,131 |
| Property and equipment: | |||
| Equipment and fixtures | 34,201 | 34,201 | 34,201 |
| Technology equipment and software | 109,640 | 109,640 | 109,640 |
| Machinery and equipment | 86,429 | 73,253 | - |
| Vehicles | 6,500 | - | - |
| Leasehold improvements | 33,841 | - | - |
| Totals | 270,611 | 217,094 | 143,841 |
| Less - Accumulated depreciation | (156,768) | (145,888) | (139,333) |
| Net property and equipment | 113,843 | 71,206 | 4,508 |
| Other assets: | |||
| Territory held for sale | 12,798 | 12,798 | 12,798 |
| Contract assets | 787,811 | 746,214 | 659,193 |
| Right of use asset - Operating leases | 13,203 | 53,324 | 63,586 |
Source: Item 21 — Financial Statements (FDD pages 48–49)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the value of the right of use asset - operating leases was $53,324 in 2023. This figure represents the company's right to use leased facilities, which are accounted for as operating leases on the balance sheet.
Right-of-use (ROU) assets and lease liabilities are recognized when Kitchen Solvers enters into a lease agreement. The ROU asset reflects the company's right to use the leased asset (e.g., office space), while the lease liability represents the obligation to make lease payments. These are initially measured at the present value of the lease payments.
For a prospective Kitchen Solvers franchisee, understanding these lease obligations is crucial. The financial statements indicate that Kitchen Solvers leases its facilities under three-year leases with monthly base rent payments extending through 2025. The weighted average remaining lease term for operating leases was 1.46 years as of 2023, with a weighted average discount rate of 4.95%. These factors influence the present value calculation of the lease liabilities and the corresponding ROU assets. Franchisees should be aware of how these lease expenses and assets impact the company's overall financial health and stability.