What components comprise the lease expenses for Monicals Pizza's finance leases?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
-----|-----------|-----------------|--| | Finance lease expense: | | | | | | Amortization of right-of-use assets | $ | 389,353 | $ 378,130 | | | Interest on lease liabilities | | 34,125 | 34,864 | | | Operating lease expense | | 921,851 | 906,435 | | | Total lease expense | $ | 1,345,329 | $ 1,319,429 | |
The operating right-of-use assets and lease liabilities were
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, finance lease expenses consist of two components: amortization of right-of-use assets and interest on lease liabilities. In 2024, the amortization of right-of-use assets was $389,353, while the interest on lease liabilities was $34,125. The total finance lease expense for 2024 was $1,345,329, which also includes operating lease expenses of $921,851.
For the year 2023, the amortization of right-of-use assets amounted to $378,130, and the interest on lease liabilities was $34,864. The total lease expense, including operating lease expenses, was $1,319,429. The operating lease expense for 2023 was $906,435.
Prospective Monicals Pizza franchisees should understand these components to accurately forecast their potential lease-related expenses. Amortization reflects the expense of using the leased asset over its life, while interest represents the cost of financing the lease obligation. Understanding these figures helps in assessing the overall financial impact of leasing versus owning property and equipment for the franchise.