What was the total value of operating lease right-of-use assets for Monicals Pizza in 2023?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------|-----------------| | Right-of-use assets: | | | | Operating leases | $ 4,675,079 | $ 5,268,530 | | Finance leases | 798,818 | 1,134,741 | | | | | | Total right-of-use assets | $ 5,473,897 | $ 6,403,271 | | | | | | Lease liabilities: | | | | Current operating lease liabilities | $ 842,149 | $ 811,560 | | Current finance lease liabilities | 353,202 | 343,795 | | Long-term operating lease liabilities | 3,934,840 | 4,553,042 | | Long-term finance lease liabilities | 504,997 | 813,703 | | | | | | Total lease liabilities | $ 5,635,188 | $ 6,522,100 |
Below is a summary of expenses incurred pertaining to leases
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the total value of operating lease right-of-use assets for the year 2023 was $5,268,530. This figure represents the value of assets that Monicals Pizza has the right to use under operating leases, which are leases where the company essentially rents the asset rather than owning it outright. These assets are a significant part of Monicals Pizza's financial structure, reflecting their reliance on leased properties and equipment for their operations.
For a prospective franchisee, understanding the nature and extent of these lease obligations is crucial. Operating leases typically involve ongoing rental payments, which can impact the franchisee's monthly expenses and overall profitability. The fact that Monicals Pizza had operating leases with a weighted average remaining lease term of 7.92 years as of December 31, 2023, suggests that franchisees can expect to enter into relatively long-term lease agreements.
It's important to note that these figures are based on a specific accounting methodology, including the application of a weighted average discount rate of 2.10% for the year ended December 31, 2023, in calculating the right-of-use assets and lease liabilities. Franchisees should consult with financial advisors to fully understand the implications of these lease arrangements and how they might affect their individual financial situations.