What was the total net value of Bojangles' property and equipment, after accounting for accumulated depreciation and amortization, as of December 29, 2024?
Bojangles Franchise · 2025 FDDAnswer from 2025 FDD Document
| (dollars in thousands) | December 29, 2024 | December 31, 2023 | December 25, 2022 |
|---|---|---|---|
| Revenues | |||
| Company-operated restaurant revenues | $ 593,957 | $ 594,036 | $ 544,368 |
| Franchise royalty revenues | 47,116 | 42,204 | 39,311 |
| Property and equipment rental revenues | 9,609 | 8,939 | 9,955 |
| Other franchise revenues | 954 | 1,546 | 536 |
| Total revenues | 651,636 | 646,725 | 594,170 |
| Restaurant operating expenses | |||
| Company-operated restaurant food and packaging costs | 178,743 | 184,476 | 183,354 |
| Company-operated restaurant labor costs | 175,628 | 184,777 | 174,606 |
| Company-operated restaurant operating costs | 142,494 | 139,712 | 136,080 |
| Company-operated restaurant depreciation and amortization | 23,890 | 20,156 | 15,896 |
| Costs associated with property and equipment rentals | 9,462 | 7,193 | 8,543 |
| Total restaurant operating expenses | 530,217 | 536,314 | 518,479 |
| Operating income before other operating expenses | 121,419 | 110,411 | 75,691 |
| Other operating expenses | |||
| General and administrative | 20,832 | 18,163 | 18,057 |
| Depreciation and amortization | 36,107 | 36,109 | 36,138 |
| Restaurant closures and refranchising costs, net of gains | |||
| and related asset write-downs | 1,937 | 6,975 | 2,981 |
| Loss (gain) on disposal of property and equipment and other | 278 | (205) | 886 |
| Total other operating expenses | 59,154 | 61,042 | 58,062 |
| Operating income | 62,265 | 49,369 | 17,629 |
| Interest income | 2 | - | - |
| Interest expense | (258) | (138) | (162) |
| Net income | $ 62,009 | $ 49,231 | $ 17,467 |
(b) Finance lease assets are included in property and equipment, net and were recorded net of accumulated amortization of $17,492 and $17,453 as of December 29, 2024 and December 31, 2023, respectively.
(dollars in thousands, except par values and per unit values)
Lease costs and rental income were as follows:
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Finance leases are recorded at the lesser of the estimated fair value or the present value of amounts due under the lease. The Company reviews for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable through future undiscounted cash flows. Impairment charges result primarily from the carrying value of Company-operated restaurant assets exceeding the estimated fair market value. The Company recognized property and equipment impairment charges of $787 under Restaurant closures and refranchising costs, net of gains and related asset write-downs in the consolidated statement of operations for the year ended December 29, 2024. No property and equipment impairment charges were recorded during the years ended December 31, 2023 and December 25, 2022.
(dollars in thousands, except par values and per unit values)
Source: Item 22 — CONTRACTS (FDD page 82)
What This Means (2025 FDD)
According to Bojangles's 2025 Franchise Disclosure Document, the net value of property and equipment as of December 29, 2024, is detailed in the consolidated balance sheets. The document specifies that property and equipment, net of accumulated depreciation and amortization, totaled $164,497 (in thousands). This figure reflects the original cost of Bojangles' property and equipment, less any depreciation and amortization expenses recognized up to that date.
For a prospective franchisee, this number provides insight into the capital-intensive nature of Bojangles' operations. Property and equipment typically include land, buildings, leasehold improvements, furniture, fixtures, and equipment necessary to run the business. The net value indicates the remaining book value of these assets after accounting for their use over time. A higher net value might suggest more recent investments in assets, while a lower value could indicate older assets or aggressive depreciation policies.
Additionally, the FDD notes that finance lease assets are included within property and equipment, net of accumulated amortization. As of December 29, 2024, the accumulated amortization for these finance lease assets was $17,492 (in thousands). This detail is important because finance leases represent a form of financing for Bojangles, where the company leases assets with terms that transfer substantially all the risks and rewards of ownership to the lessee. Understanding the extent of finance leases helps in assessing the overall financial obligations and capital structure of Bojangles.
It is also important to note that Bojangles recognized property and equipment impairment charges of $787 (in thousands) during the year ended December 29, 2024. These charges reflect a reduction in the carrying value of assets when their recoverable amount falls below their book value, which can occur due to factors like obsolescence or changes in market conditions. Monitoring impairment charges can provide insights into the operational efficiency and asset management practices of Bojangles.