What was the effective tax rate for Auntie Annes as of December 31, 2023?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
| December 31, | December 25, | |
|---|---|---|
| For the fiscal years ended: | 2023 | 2022 |
| Statutory rate | 21.0 | 21.0 |
| % | % | |
| State income tax, net of federal tax effect | 3.3 | 3.7 |
| Foreign income tax, net of federal tax effect | 3.2 | 2.6 |
| Foreign tax credits | (3.1) | (2.5) |
| Permanent differences | (1.6) | (0.9) |
| Other differences, net | (1.4) | (0.2) |
| Effective tax rate | 21.4 | 23.7 |
| % | % |
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the effective tax rate as of December 31, 2023, was 21.4%. This rate reflects the actual percentage of income that Auntie Anne's paid in taxes after considering various factors that can increase or decrease the tax burden. These factors include state income taxes, foreign income taxes, foreign tax credits, permanent differences, and other net differences.
For a prospective franchisee, understanding the effective tax rate of the franchisor can provide insight into the financial health and tax planning strategies of the company. While the franchisee's tax obligations will differ based on their individual business circumstances, knowing the franchisor's tax situation can contribute to a more comprehensive financial assessment.
The FDD also lists the statutory tax rate for 2023 as 21.0%. The difference between the statutory rate and the effective rate (21.4%) indicates the net impact of the various adjustments listed in the table. A higher effective tax rate compared to the statutory rate suggests that the company's tax burden was increased by factors such as state and foreign income taxes, while a lower effective rate would suggest the opposite.
It is important to note that these figures pertain to Auntie Anne's as a whole and not to individual franchisees. Franchisees should consult with their own tax advisors to understand their specific tax obligations and how they might be affected by changes in tax laws or business operations.