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A restaurant can look like a simple business: secure a location, fit out the kitchen, hire a team, and sell meals. The accounting is less simple. At the end of 2025, CAVA Group disclosed $624.9 million of future minimum operating lease payments. Its recognized operating lease liability was $466.2 million. A further $146.5 million of payments related to signed leases that had not yet commenced and therefore was not included in that maturity schedule. These are three distinct amounts, not three versions of the same debt balance. The distinction is a practical reason to understand US GAAP ASC 842. Source: CAVA FY2025 Form 10-K, Note 9
The most revealing lease number may not be the liability on the balance sheet. It may be the cash payments that stretch far beyond the next fiscal year.
Why a new restaurant creates a long-term accounting decision
CAVA reports that its restaurant locations are leased rather than owned. Its FY2025 Form 10-K describes restaurant leases that typically begin with ten-year terms and may include five-year renewal options. Whether an option enters the accounting lease term depends on whether exercise is reasonably certain, not merely whether the option exists. This judgment affects both the period covered by recognized obligations and the pattern of expense.
Under ASC 842, an operating lease generally produces a right-of-use asset and a lease liability when the lease commences. The liability is the present value of qualifying future lease payments. The right-of-use asset starts from that liability and is adjusted for factors such as prepayments, incentives and initial direct costs. This is why reading only the liability line omits part of the operating story.
For a growing restaurant chain, the decision to sign space today can create cash commitments long before the location generates mature sales. The financial statements recognize some of those commitments when the lease commences, while other executed leases can still be waiting in the wings.
The $624.9 million maturity schedule
CAVA's Note 9 separates future undiscounted minimum payments from the present-value liability. The timing is especially useful: payments extend across the next five fiscal years and materially beyond 2030.
The maturity ladder includes $624.878 million of minimum payments. It excludes $146.5 million relating to executed leases not yet commenced. The "Later" bar aggregates payments after fiscal 2030.
| Reconciliation | USD millions |
|---|---|
| Undiscounted minimum lease payments | 624.878 |
| Less: imputed interest | (158.630) |
| Recognized operating lease liability | 466.248 |
| Signed but not yet commenced (excluded above) | 146.5 |
The key calculation is straightforward: $624.878 million less $158.630 million of imputed interest equals $466.248 million. The gap is not a hidden loss or forgiven rent. It reflects discounting future cash flows to a present value. CAVA reported a weighted-average discount rate of 6.63% and a weighted-average remaining lease term of 8.5 years at year-end; those are portfolio measures, not sufficient inputs to reconstruct every lease individually.
$624.9M
Undiscounted rent in the maturity ladder.
$466.2M
Present value of commenced operating leases.
$146.5M
Not commenced and excluded from the ladder.
Lease expense is not the same as cash paid
The lease note also reports $70.582 million of total lease cost for 2025, compared with $59.090 million in 2024 and $50.361 million in 2023. Cash paid for operating lease liabilities was $64.842 million in 2025, up from $58.172 million in 2024. The numbers differ because expense recognition, cash payments, variable items and lease commencement do not move in lockstep.
The risk-factor section gives another perspective: operating lease costs represented 7.0% of revenue in FY2025, down from 7.1% in 2024 and 8.2% in 2023. That trend may suggest improving occupancy leverage, but it should not be mistaken for a reduction in the absolute level of lease commitments. The company can improve its rent-to-sales ratio while taking on additional commitments through expansion.
A particularly interesting non-cash item is the $108.467 million of operating lease assets obtained in exchange for operating lease liabilities in 2025. It illustrates how a new lease can add an asset and a liability without the same amount appearing as a contemporaneous cash expenditure.
Store three separately named fields: undiscounted payments, recognized lease liability, and executed leases not yet commenced. Record the measurement date and source. Never combine these into a single “lease debt” figure without explaining the overlap and accounting basis.
What this changes for a restaurant analyst
For a restaurant business, ASC 842 turns occupancy into something more visible than annual rent expense. The maturity schedule is useful for liquidity and resilience analysis; the recognized liability matters to leverage and enterprise-value discussions; and leases not yet commenced reveal a portion of the commitments associated with the next stage of growth.
None of these amounts, alone, tells us whether opening more restaurants will create value. That requires unit economics, cash generation, capital expenditure and the timing of new locations. But the lease note shows what must be paid before the upside is realized. It is where a business expansion story meets contractual reality.
Behind the figures: For the evidence trail and numeric checks behind this analysis, read Behind the Figures: how the CAVA lease amounts were reconciled.
- CAVA Group, Inc. FY2025 Form 10-K — Note 9 (Leases), accounting policy, Item 7 and Item 1A.
- ASC 606 in practice: Duolingo's subscription revenue — another company case study in this series, to be published separately.
- Behind the Figures: how the CAVA lease amounts were reconciled — a separate Clarifo workflow and audit trail.
- US GAAP in Practice — series index.