What was the computed "expected" tax benefit for Bojangles for the year ended December 29, 2024?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
31, 2023 | | | Revenue recognized that was not included in the deferred revenue balance | | | as of December 31, 2023 | (53) | | Franchise fee refunds | (169) | | Increase due to cash received | 2,000 | | Deferred revenue, balance as of December 29, 2024 | 11,302 | | Less: Current portion of deferred revenue | (689) | | Noncurrent portion of deferred revenue | $ 10,613 |
Revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) for fiscal years subsequent to December 29, 2024 are as follows:
| 2025 | $ 689 | |---------------------|--------------| | 2026 | 678 | | 2027 | 668 | | 2028 | 669 | | 2029 | 589 | | Thereafter | 8,009 $ 11,302 |
(dollars in thousands, except par values and per unit values)
11. Income Taxes
Income tax (expense) benefit is as follows:
| Years Ended | ||||||
|---|---|---|---|---|---|---|
| December 29, 2024 |
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the computed "expected" tax benefit for the year ended December 29, 2024, was $2,278 (in thousands). This figure represents the initial calculation of the tax benefit before considering other factors that may increase or reduce the final income tax benefit or expense. These factors include items such as the amortization of goodwill, state and local income taxes, work opportunity and welfare to work tax credits, disallowance of share-based compensation arrangements, meals and entertainment expenses, and other miscellaneous items.
The FDD further details how these additional factors impact the overall tax benefit. For instance, the amortization of goodwill, which is not deductible for income tax purposes, resulted in a reduction of $8,439 (in thousands) for the year ended December 29, 2024. State and local income taxes, net of federal income tax expense/benefit, also reduced the tax benefit by $1,138 (in thousands). Conversely, work opportunity and welfare to work tax credits increased the tax benefit by $727 (in thousands). Disallowance of share-based compensation arrangements, meals and entertainment, and other net adjustments further reduced the tax benefit by $187, $49, and $332 (all in thousands), respectively.
After accounting for all these adjustments, the final income tax expense for Bojangles for the year ended December 29, 2024, was $(7,140) (in thousands). This means that, overall, Bojangles experienced a net income tax expense rather than a benefit for that year. Prospective franchisees should be aware that a variety of factors, not just the "expected" tax benefit, can significantly influence the actual tax outcome for the company.