What was the statutory tax rate for Auntie Annes as of December 25, 2022?
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 Annes's 2024 Franchise Disclosure Document, the statutory tax rate as of December 25, 2022, was 21.0%. This is the standard corporate tax rate applied before considering any deductions, credits, or other adjustments. The document also lists the state income tax rate net of federal tax effect as 3.7% and the foreign income tax rate net of federal tax effect as 2.6% for the same period.
The effective tax rate, which reflects the actual tax liability after all adjustments, was 23.7% as of December 25, 2022. This differs from the statutory rate due to factors such as foreign tax credits, permanent differences, and other net differences, which impact the overall tax burden. For instance, foreign tax credits reduced the tax liability by 2.5%, while permanent differences reduced it by 0.9%.
For a prospective Auntie Annes franchisee, understanding these tax rates is crucial for financial planning and assessing the profitability of the franchise. The statutory rate provides a baseline, while the effective rate offers a more realistic view of the company's actual tax obligations. Fluctuations in these rates from year to year can influence the net income and overall financial health of the company, which in turn can affect the franchisee's investment.