What was the net deferred tax liabilities for Auntie Annes as of December 31, 2023?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
Employees can participate in the 401(k) Plan the first of the month following their date of hire. The 401(k) Plan is available to all employees age 21 and older. Company contributions to the 401(k) Plan are based on a percentage of the employee contributions and are immediately vested. Employer contributions to the 401(k) Plan were $3,205 and $2,568 for the fiscal years ended December 31, 2023 and December 25, 2022, respectively.
9 Income Taxes
Components of the provision for income taxes are as follows:
| EVENT | COMPLETIONDEADLINE | |---|---| | Site Approval Deadline (Section 6.5.A.) | Not applicable | | Construction Start Deadline (Section 6.5.B.) | Within 240 days after the Effective Date | | Opening Deadline (Section 6.5.C.) | Within 360 days after the Effective Date | The reconciliation between the statutory income tax rate and the effective income tax rate is as follows:
| 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 i |
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Anne's 2024 Franchise Disclosure Document, the company's net deferred tax liabilities as of December 31, 2023, were reported as a negative $74,271. This figure represents the net amount of deferred tax liabilities, which are tax obligations that are postponed to a future period. Deferred tax liabilities arise from temporary differences between the accounting and tax treatment of certain items, such as depreciation or revenue recognition. These liabilities are expected to result in taxable income in the future when the temporary differences reverse.
For a prospective Auntie Anne's franchisee, understanding deferred tax liabilities is crucial for assessing the financial health and stability of the franchisor. While deferred tax liabilities themselves are not an immediate cash outflow, they indicate future tax obligations that could impact the franchisor's profitability and cash flow. A significant increase in deferred tax liabilities could signal aggressive accounting practices or potential future tax burdens.
In addition to the net deferred tax liabilities, the FDD also provides a breakdown of the total deferred tax liabilities and total deferred tax assets. As of December 31, 2023, the total deferred tax liabilities were $(150,447), while the total deferred tax assets, net, were $76,176. Reviewing these figures can provide a more comprehensive view of the company's tax position and potential future tax obligations. Franchisees may want to discuss these figures with a financial advisor.