What was the amortization of right-of-use assets for Monicals Pizza's finance leases in 2023?

According to Monicals Pizza's 2025 Franchise Disclosure Document, the amortization of right-of-use assets for finance leases in 2023 was $378,130. This figure represents the expense recognized during the year for the depreciation of assets that Monicals Pizza uses under finance lease agreements. These assets are recorded on the company's balance sheet as 'right-of-use' assets, reflecting their control over the leased assets during the lease term.

For a prospective Monicals Pizza franchisee, understanding the amortization of right-of-use assets is crucial because it directly impacts the reported expenses and profitability. Finance leases are typically used for long-term assets, such as property or equipment, where the franchisee essentially assumes the risks and rewards of ownership. The amortization expense reflects the gradual consumption of the economic benefits associated with these assets over their useful life.

The FDD also provides context on how Monicals Pizza accounts for leases, noting that the company adopted FASB Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). This standard requires companies to recognize lease assets and liabilities on the balance sheet. The finance lease expenses are comprised of the amortization of the right-of-use asset and interest expense recognized based on the effective interest method.

It is important for potential franchisees to review these figures in conjunction with other financial disclosures in the FDD to assess the overall financial health and leasing strategy of Monicals Pizza. Understanding the terms and conditions of the leases, as well as the accounting policies applied, can help franchisees make informed decisions about their investment and operational strategies.