How does Pump It Up account for nonlease components in its lease agreements?

According to the 2025 Pump It Up Franchise Disclosure Document, Pump It Up has elected not to separate nonlease components from lease components within its lease agreements. Instead, each lease component and any nonlease components are accounted for as a single lease component. This means that when Pump It Up evaluates its lease agreements, it combines all aspects, such as maintenance or service agreements that might be bundled with the lease, into one single lease component for accounting purposes.

For a prospective Pump It Up franchisee, this approach simplifies the accounting process related to leases. Rather than distinguishing between what portion of a payment covers the physical space and what covers other services, the franchisee treats the entire payment as a single lease expense. This can make budgeting and financial tracking more straightforward.

It is important to note that Pump It Up's lease agreements do not contain any material residual value guarantees or material restrictive covenants. This indicates that the franchisee is unlikely to face significant financial obligations related to the residual value of the leased property at the end of the lease term or be subject to overly restrictive conditions within the lease agreement.