What was the total amount of deferred income tax liabilities for Bojangles as of December 31, 2023?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
d | | | | | | | | U.S. federal | | 1,794 | | (299) | | 1,945 | | State and local | | 185 | | (689) | | 289 | | Total deferred income tax benefit (expense) | | 1,979 | | (988) | | 2,234 | | Income tax (expense) benefit | $ | (7,140) | $ | (6,241) | $ | 3,087 | Income tax (expense) benefit for years ended December 29, 2024, December 31, 2023 and December 25, 2022 differed from the amounts computed by applying the U.S. federal income tax rate to pretax income as a result of the following:
| Years Ended | |||||
|---|---|---|---|---|---|
| December 29, 2024 | December 31, 2023 | December 25, 2022 | |||
| Computed "expected" tax benefit | $ | 2,278 | $ | 5,039 | $ 9,985 |
| Reduction (increase) in income taxes resulting from | |||||
| Amortization of goodwill not deductible for |
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the total deferred income tax liabilities as of December 31, 2023, were $(149,012). This figure represents the cumulative amount of income tax that Bojangles has deferred to future years. Deferred tax liabilities generally arise from temporary differences between the book value of an asset or liability and its tax basis. These differences will result in taxable amounts in the future when the asset is recovered or the liability is settled.
For a prospective Bojangles franchisee, understanding deferred income tax liabilities is crucial for assessing the financial health and stability of the company. While deferred tax liabilities are not an immediate cash outflow, they represent future tax obligations that could impact Bojangles's profitability and cash flow. Franchisees should consider these liabilities when evaluating the overall financial condition of the franchisor and its potential impact on the franchise system.
The components contributing to the total deferred income tax liabilities include brand, right of use assets, franchise rights and other intangible assets, and property and equipment and finance lease obligations. Specifically, as of December 31, 2023, the brand contributed $(78,566), right of use assets contributed $(54,837), franchise rights and other intangible assets contributed $(9,326), and property and equipment and finance lease obligations contributed $(6,283) to the total deferred income tax liabilities. These figures provide a more detailed breakdown of the factors influencing Bojangles's deferred tax position.
It is important for potential franchisees to consult with financial advisors to fully understand the implications of deferred income tax liabilities and how they may affect the franchise system's long-term financial performance. Reviewing these figures in conjunction with other financial statement information can provide a more comprehensive view of Bojangles's financial health and potential risks and opportunities for franchisees.