What was the reported interest on lease liabilities for Monicals Pizza in 2023?
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 pe |
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the interest on lease liabilities for the year 2023 was $34,864. This figure represents the cost of financing the company's lease obligations for its restaurant buildings and vehicles. Lease liabilities arise from Monicals Pizza entering into lease agreements for the use of property and equipment, and the interest reflects the expense incurred over the lease term.
For a prospective Monicals Pizza franchisee, understanding the interest on lease liabilities is crucial because it provides insight into the financial obligations associated with leasing property and equipment. While this specific figure pertains to the company's overall financial performance, it highlights the importance of considering lease-related expenses when evaluating the profitability of a franchise location. Franchisees typically incur lease expenses for their restaurant locations, and these costs can significantly impact their bottom line.
It's important to note that the interest on lease liabilities is just one component of the overall lease expenses. Other factors, such as base rent, percentage rent, and vehicle lease expenses, also contribute to the total cost of leasing. Franchisees should carefully review the lease terms and conditions for their specific location to understand the full extent of their financial obligations. Additionally, they should consider factors such as renewal options and early termination options, as these can impact the long-term cost of leasing.
In summary, the reported interest on lease liabilities for Monicals Pizza in 2023 provides a valuable benchmark for prospective franchisees to assess the financial implications of leasing property and equipment. By understanding these costs and carefully evaluating lease terms, franchisees can make informed decisions and optimize their profitability.