What was the amount of Carls' matching contributions to the 401(k) Plan during fiscal year 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
We sponsor a contributory plan ("401(k) Plan") to provide retirement benefits under the provisions of Section 401(k) of the Internal Revenue Code ("IRC"). Participants may elect to contribute a portion of their annual salaries on a pre-tax basis to the 401(k) Plan, subject to the maximum contribution allowed by the IRC. During fiscal 2024 and 2023, our matching contributions to the 401(k) Plan were $630 and $622, respectively.
We and CKE Restaurants sponsor a contributory plan ("401(k) Plan") to provide retirement benefits under the provisions of Section 401(k) of the Internal Revenue Code ("IRC"). Participants may elect to contribute a portion of their annual salaries on a pre-tax basis to the 401(k) Plan, subject to the maximum contribution allowed by the IRC. During fiscal 2024 and 2023, our matching contributions to the 401(k) Plan were $113 and $94, respectively.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the company made matching contributions to its 401(k) plan. There are actually two different matching contribution amounts listed in the document. One note indicates that during fiscal year 2023, Carls' matching contributions to the 401(k) Plan were $622. However, another note states that during fiscal year 2023, matching contributions were $94.
It appears that there are two separate 401(k) plans, as one note states "We sponsor a contributory plan" while the other states "We and CKE Restaurants sponsor a contributory plan".
A prospective franchisee should clarify with Carls which 401(k) plan their employees would be eligible for and what level of matching contributions they can expect. Understanding employee benefits is crucial for managing labor costs and attracting quality staff.