What is the present value of lease liabilities for Remax?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
nds):
| Rent Payments | Sublease Receipts | Total Cash Outflows | ||
|---|---|---|---|---|
| Year ending December 31: | ||||
| 2025 | $ | 10,278 | (1,764) | $ 8,514 |
| 2026 | 10,373 | (1,674) | 8,699 | |
| 2027 | 10,397 | (1,707) | 8,690 | |
| 2028 | 3,204 | (574) | 2,630 | |
| 2029 | 232 | — | 232 | |
| Thereafter | 314 | — | 314 | |
| Total lease payments | $ | 34,798 | $ (5,719) | $ 29,079 |
| Less: imputed interest | 3,573 | |||
| Present value of lease liabilities | $ | 31,225 |
Source: Item 1 — Business and Organization (FDD pages 334–464)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the present value of lease liabilities is $31,225. This figure is derived from a calculation that considers rent payments, sublease receipts, and imputed interest. The total lease payments are $34,798, from which $5,719 in sublease receipts are deducted, resulting in total cash outflows of $29,079. After deducting imputed interest of $3,573, the present value of lease liabilities is determined to be $31,225.
This information is relevant for prospective Remax franchisees as it provides insight into the company's financial obligations related to its leases. Understanding the present value of lease liabilities can help potential franchisees assess the financial health and stability of Remax. It is important to note that these figures pertain to Remax's corporate leases and not necessarily the leases that franchisees would enter into for their own office spaces.
The FDD also includes a breakdown of rent payments and sublease receipts for the years 2025 through 2029, as well as for all years thereafter. For example, rent payments for 2025 are projected to be $10,278 with sublease receipts of $1,764, resulting in total cash outflows of $8,514. These projections can give franchisees a sense of Remax's expected lease-related expenses and income over the next several years.
It is important for prospective franchisees to consult with a financial advisor to fully understand the implications of these lease liabilities and how they might affect Remax's overall financial performance. Additionally, franchisees should inquire about the specific terms and conditions of their own lease agreements, as these will vary depending on location and other factors.