What is the current portion of operating lease liabilities for Lees Famous Recipe?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
| LFR Chicken | Lee's Distribution | Lee's Franchisor | Lee's Franchisor Canada Ltd. | Lee's 4-Wall LLC | LFRC RE Holdings, LLC | Elimination | LFR Chicken, LLC Total | |
|---|---|---|---|---|---|---|---|---|
| Current Liabilities: | ||||||||
| Accounts payable | $ 61,141 | - $ | $ - | $ 1,160,900 | $ - | $ (63,355) | ||
| Accrued payroll and compensated absences | 82,197 | - | - | - | 160,769 | - | - | 242,966 |
| Taxes payable | - | - | - | 1,354 | 151,521 | 941 | - | 153,816 |
| Current portion of notes payable | 700,000 | - | - | - | 115,582 | - | 815,582 | |
| Current portion of operating lease liabilities | 35,500 | - | - | - | 92,949 | - | (27,463) | 100,986 |
| Current portion of deferred revenue | 0 | 79,818 | - | (2,314) | - | - | 77,504 | |
| Current portion of contingent consideration liability | 397,462 | 397,462 | ||||||
| Total current liabilities | 1,276,300 | 94,579 | 79,818 | 1,354 | 1,563,825 | 116,523 | (90,818) | 3,041,581 |
| Long-Term Liabilities: | ||||||||
| Notes payable, less current portion | 23,800,000 | - | - | - | - | 6,478,358 | - | 30,278,358 |
| Operating lease liabilities, less current portion | 40,346 | - | - | - | 8,305,164 | - | (4,875,895) | 3,469,615 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 69)
What This Means (2025 FDD)
According to the 2025 FDD, the consolidated financial statements for LFR Chicken, LLC, show a current portion of operating lease liabilities. Specifically, for Lee's 4-Wall LLC, which owns and operates restaurants, the current portion of operating lease liabilities is reported as $92,949. After an elimination of $27,463, the total current portion of operating lease liabilities is $100,986 as of December 31, 2024.
For a prospective Lees Famous Recipe franchisee, this figure represents the amount of operating lease liabilities due within the next year for the company-owned restaurants. Operating leases typically include leases for properties where the restaurants are located. The current portion reflects the payments the company must make on these leases over the next 12 months.
It is important to note that this figure pertains to the company-owned restaurants and may not directly reflect the lease obligations a new franchisee will incur. Franchisees will need to review their specific lease agreements for their restaurant locations to determine their own current operating lease liabilities. This information is crucial for budgeting and financial planning.
The FDD also lists the operating lease liabilities, less the current portion, as $8,305,164 for Lee's 4-Wall LLC. After an elimination of $4,875,895, the total operating lease liabilities, less the current portion, is $3,469,615. This represents the long-term portion of the operating leases extending beyond the next year. Understanding both the current and long-term lease obligations is essential for assessing the overall financial health and stability of the company.