What was the deferred federal income tax expense for Carls in fiscal year 2022?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
c planning and other advisory and consulting services provided to us by Roark and its affiliates, Roark receives consulting fees and reimbursement of reasonable expenses. The current annual consulting fee of
$3,262 is payable in equal quarterly installments and subject to an increase of three percent per year during the ten year term of the agreement. We recorded $3,197 and $3,106 of
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the deferred federal income tax expense for the fiscal year 2022 was an expense of $1,406. This figure is part of the broader income tax expenses reported in the financial statements. These statements provide a detailed look at how Carls accounts for income taxes, including both current and deferred portions.
Deferred income taxes arise from temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. A deferred tax expense, like the $1,406 reported, indicates that Carls expects to pay more in federal income taxes in the future due to these temporary differences. These differences can result from various factors, such as depreciation methods, revenue recognition timing, or expense accruals.
For a prospective Carls franchisee, understanding these figures is crucial for assessing the financial health and tax strategies of the company. While franchisees do not directly pay Carls's income taxes, the overall financial performance of the company can impact the support and resources available to franchisees. Reviewing these figures over several years can provide insights into the company's tax planning and financial stability. It is important to note that these figures are specific to Carls and its subsidiaries, as they file consolidated tax returns with their parent company, CKE Holding Corporation.