What was the amount of cash dividends paid to CKE Inc. by Carls as of January 31, 2022?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
-----------| | | | $ 234,259 | | | 32,566 | 34,579 | | Estimated liability for self-insurance, long-term portion | 12,183 | 13,743 | | Unfavorable lease agreements (I) | 6,911 | 43,499 | | 2 | 242 | 18,437 | | Estimated liability for deferred rent, long-term portion ( | | | | l | | | | Other | 5,888 | 4,593 | | Total other long-term liabilities $ | 277,497 | $ 349,110 ======== |
- (1) The decrease in unfavorable leases agreements reflects the reclassification of unfavorable leases liabilities where we are the lessee in the underlying operating lease to the operating lease assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 9, *Lea
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, during fiscal year 2022, Carls paid a cash dividend of $105,000 to CKE Inc. Additionally, CKE Inc. made a capital contribution to CKE Restaurant Holdings, Inc. of $41,500 during the same fiscal year. These transactions reflect the financial interactions between Carls and its parent company.
For a prospective franchisee, this indicates the flow of funds between Carls and its parent company, CKE Inc. Dividends represent a distribution of profits from Carls to its parent company, while capital contributions are investments made by the parent company into Carls. Understanding these financial relationships can provide insight into the financial health and stability of the franchise system.
It's important to note that the ability of CKE Restaurants to declare and pay dividends may be limited by certain covenants and restrictions included in the Indenture governing the Senior Notes. This could potentially impact the future dividend payouts from Carls to CKE Inc. and should be considered when evaluating the financial performance of the franchise.