What was the total lease expense for Monicals Pizza for the year ended December 31, 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 total lease expense for the year ended December 31, 2022, was $1,136,032. This figure encompasses various components of lease expenses, including amortization of right-of-use assets, interest on lease liabilities, and operating lease expenses. Understanding the composition of this total is crucial for prospective franchisees to assess the financial obligations associated with leasing restaurant locations and vehicles.
Specifically, the components contributing to the total lease expense in 2022 include $219,501 for the amortization of right-of-use assets, $16,152 for interest on lease liabilities, and $900,379 for operating lease expenses. These figures provide a detailed breakdown of the different types of lease-related costs that Monicals Pizza franchisees can expect to incur. The right-of-use assets typically refer to the franchisee's right to use a property for the lease term, while operating lease expenses cover the cost of using the restaurant buildings and vehicles.
For a potential Monicals Pizza franchisee, this information highlights the significance of lease expenses as a substantial part of their financial commitments. Franchisees should carefully evaluate lease terms, including renewal options and contingent rent amounts, to manage these expenses effectively. Additionally, understanding the breakdown between finance and operating leases can aid in financial planning and forecasting. It's important to note that these figures reflect expenses for company-owned locations, and individual franchise locations may vary.
It is also important to note that the company is committed under noncancellable operating leases for the use of several of its restaurant buildings in various Illinois locations. The leases have varying expiration dates through 2033, with some of the leases containing renewal options that expire through 2037. In addition to base rentals, several of the leases include contingent rent amounts based on a percentage of gross sales. Additionally, the Company leases vehicles for their stores to use for deliveries. The vehicle lease terms range from four to five years with expiration dates ranging from January 2026 to November 2028.