What was the operating lease cost for Precision Door Service in 2024?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
costs are not included in the measurement of the ROU asset or lease liability due to unpredictability of the payment amount and are recorded as lease expense in the period incurred. The ROU asset is adjusted to account for previously recorded lease-related expenses such as deferred rent and other lease liabilities.
The components of lease cost are as follows (in thousands):
| | December 31, | | | | |-----------------------------------------------
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the operating lease cost for the year ending December 31, 2024, was $7,149. The FDD also provides a comparative figure for the year ending December 31, 2023, which was $7,855. This indicates a decrease in operating lease costs from 2023 to 2024. These costs primarily relate to leases for office and retail space used by company-operated stores and corporate offices.
In addition to operating lease costs, Precision Door Service also incurs variable and finance lease costs. The total lease cost, which includes all three types of lease costs, was $16,411 for the year ending December 31, 2024, and $13,926 for the year ending December 31, 2023. This suggests that while operating lease costs decreased, the other lease costs increased, resulting in a higher total lease cost for 2024.
For a prospective franchisee, understanding these lease costs is crucial. While the provided data reflects Precision Door Service's overall lease expenses, franchisees should inquire about the specific lease obligations they will incur for their individual locations. These costs can vary significantly depending on the size and location of the premises. Additionally, franchisees should be aware of potential rent escalations and other variable lease costs, such as real estate taxes and building operating expenses, which can impact their overall financial performance.