What was the deferred compensation expense for Aunt Millies Bakeries as of September 30, 2023?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
d $47,000 and $42,000, respectively. Total Defined Benefit Plan net periodic income approximated $74,000 and $63,000 in 2024 and 2023, respectively.
The Defined Benefit Plan was overfunded by $919,329 and $310,322 at September 30, 2024 and 2023, respectively. The Health Plans were underfunded by $1,810,865 and $1,788,274 at September 30, 2024 and 2023, respectively. The measurement date used to determine the benefit obligations of each Plan was each September 30.
NOTE 8 - DEFERRED COMPENSATION
The Company maintains a deferred compensation plan for certain key employees. Under the plan the Company contributes a portion of its yearly adjusted net profits as determined by a committee appointed by the Board of Directors.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the company maintains a deferred compensation plan for certain key employees, contributing a portion of its yearly adjusted net profits as determined by a committee appointed by the Board of Directors. Employees generally vest in a portion of the contributed amount after five-year increments of participation in the plan. The deferred compensation expense for the yearly contribution is included in general and administrative expenses. As of September 30, 2023, there was no deferred compensation expense recorded. However, the company recorded accrued deferred compensation of approximately $3,472,000 to other long-term liabilities on the consolidated balance sheets as of September 30, 2023.
This means that while there was no expense recognized for deferred compensation in the income statement for the year ending September 30, 2023, Aunt Millies Bakeries had an existing liability of $3,472,000 related to deferred compensation obligations. This liability represents the cumulative amount the company owes to its key employees under the deferred compensation plan as of that date. The absence of an expense for that particular year suggests that no new contributions were made to the plan during that period, but the existing obligation remained on the balance sheet.
For a prospective franchisee, this information provides insight into Aunt Millies Bakeries's employee compensation practices and its financial obligations. While it may not directly impact the franchisee's operations, understanding the company's financial commitments can offer a more comprehensive view of its overall financial health and stability. It is important to note the distinction between the deferred compensation expense (which was zero) and the accrued deferred compensation liability ($3,472,000), as they represent different aspects of the deferred compensation plan's impact on the company's financials.