What was the amount of noncash lease expense for Monicals Pizza in 2022?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2023 and 2022: | |||
|---|---|---|---|
| 2023 | 2022 | ||
| Finance lease expense: | |||
| Amortization of right-of-use assets | $ 378,130 | $ 219,501 | |
| Interest on lease liabilities | 34,864 | 16,152 | |
| O perating lease expense | 906,435 | 900,379 | |
| Total lease expense | $ 1,319,429 | $ 1,136,032 |
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the finance lease expense for the amortization of right-of-use assets was $219,501 in 2022. The interest on lease liabilities was $16,152 in 2022. The operating lease expense was $900,379 in 2022. The total lease expense was $1,136,032 in 2022.
For a prospective Monicals Pizza franchisee, understanding these lease expenses is crucial. The amortization of right-of-use assets represents the expense recognized over the lease term for the use of leased assets, while interest on lease liabilities reflects the cost of financing these leases. Operating lease expense covers the regular rental payments for the use of properties.
The distinction between these different types of lease expenses can impact a franchisee's financial planning and profitability analysis. Franchisees should carefully review the terms of their leases and understand how these expenses are calculated and reported, as they can significantly affect the overall cost of operating a Monicals Pizza restaurant.
It's important for potential franchisees to consult with a financial advisor to fully understand the implications of these lease expenses and how they fit into their broader financial strategy. Understanding these costs will aid in forecasting expenses and budgeting effectively.