What was the total amount of facility action charges, net, for Carls in fiscal year 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
urants and other revenue consisted of the following:
| Royalties | $ | 190,073 | $ | 182,255 |
|---|---|---|---|---|
| Rent and other occupancy | 100,611 | 105,248 | ||
| Franchise fees | 4,917 | 6,142 | ||
| Other | 4,353 | 9,029 | ||
| Total franchised restaurants and other revenue | $ | 299,954 | $ | 302,674 |
Franchised restaurants and other expense consisted of the following:
| Fiscal 2024 | Fiscal 2023 | |
|---|---|---|
| Rent and other occupancy | $ 78,697 | $ 77,492 |
| Amortization of franchise agreements | 16,857 | 16,857 |
| Other | 1,100 | 83 |
| Total fran |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total facility action charges, net, for fiscal year 2024 was $2,852. These charges encompass various financial impacts resulting from actions such as identifying restaurants with carrying values exceeding their fair values, recording impairment charges, closing or refranchising restaurants, and leasing or subleasing restaurant properties.
Facility action charges, net, include impairment of restaurant-level long-lived assets for restaurants to be disposed of or held and used, store closure costs (including subleasing closed facilities at amounts below primary lease obligations), and gain or loss on the sale of restaurants, including refranchising transactions.
Carls identifies that considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value, closure costs, expected sublease income, and refranchising proceeds. The FDD notes that actual results could vary significantly from their estimates. This means that the reported figure is subject to change and is based on management's best judgment at the time of reporting.