What was the operating lease cost for Precision Door Service as of December 31, 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 ended December 31, 2024, was $7,149. The FDD also provides a comparative figure for the year ended December 31, 2023, which was $7,855. These costs reflect the rent expense for operating leases.
In addition to operating lease costs, Precision Door Service also incurred other lease-related expenses. The variable lease cost for the year ended December 31, 2024, was $324, while the finance lease costs included $7,849 for the amortization of right-of-use assets and $1,088 for interest on lease obligations. The total lease cost, encompassing all these components, amounted to $16,411 for the year ended December 31, 2024.
Prospective franchisees should understand the different types of lease costs and how they contribute to the overall financial obligations of Precision Door Service. Operating leases typically cover the use of office and retail space, while finance leases may involve vehicles or other equipment. Understanding the terms and conditions of these leases is crucial for assessing the financial health and stability of the franchise.