What is the total operating lease liability reported for Pearce Bespoke?

According to Pearce Bespoke's 2025 Franchise Disclosure Document, the company's total operating lease liability is $43,842. This figure represents the sum of the current portion of the operating lease liability ($22,822) and the long-term portion ($21,020) as of a specific date, presumably December 31, 2023, based on the context of the provided financial statements. The right-of-use asset related to this lease is valued at $43,692.

For a prospective Pearce Bespoke franchisee, understanding the franchisor's lease obligations can provide insight into the company's financial health and stability. Lease liabilities typically arise from agreements to lease office space or other assets necessary for business operations. In Pearce Bespoke's case, the lease relates to office space, as detailed in Note 4 of the financial statements. The initial lease term was 22 months, running through October 2025, with monthly payments ranging from $2,000 to $2,150.

The presence of an operating lease liability indicates that Pearce Bespoke has committed to future lease payments. While this is a common business practice, it's important for franchisees to consider how such liabilities might impact the franchisor's ability to support its franchisees, especially during economic downturns. The lease expense recorded for the year ended December 31, 2024, was $23,760, providing further context to the scale of these obligations.

It is also worth noting that the lease was recorded under ASC 842 "Leases", which requires companies to recognize right-of-use assets and lease liabilities on the balance sheet. The valuation of these items involves discounting future lease payments using an appropriate discount rate, which in this case was 4.95%. Prospective franchisees should review the complete financial statements and related notes to fully understand Pearce Bespoke's financial position and lease obligations.