What was the reduction (increase) in income taxes resulting from amortization of goodwill not deductible for income tax purposes 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, for the year ended December 29, 2024, there was a reduction (increase) in income taxes resulting from amortization of goodwill not deductible for income tax purposes. This amounted to $(8,439) thousand.
In simpler terms, this means that the amortization of goodwill, which is an accounting practice of writing off the value of a company's goodwill over time, resulted in a decrease in income taxes for Bojangles. However, since this amortization was not deductible for income tax purposes, it led to an increase in the company's tax liability. The specific impact was an increase of $8,439,000 in income taxes due to this non-deductible amortization.
For a prospective franchisee, this information provides insight into how Bojangles manages its finances and accounts for goodwill. Goodwill typically arises when a company acquires another business, and it represents the intangible assets that are not separately identifiable. Understanding how Bojangles handles goodwill amortization and its tax implications can help franchisees assess the financial health and tax strategies of the company.
It's important to note that tax laws and accounting practices can be complex and may change over time. Franchisees should consult with their own financial advisors to understand the specific tax implications of investing in a Bojangles franchise and how these factors may affect their own financial situation.