What was the total amount of interest expense for Carls in fiscal year 2022?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| | Carl's Jr. Restaurants LLC | Carl's Jr. FundingLLC | Carl's Jr. SPY Guarantor LLC | Hardee's Restaurants LLC | Hardee's FundingLLC | Hardee's SPY Guarantor LLC | Eliminations | The CKE Securitization Entities | |-------------------------------------|-------------------------------|--------------------------|---------------------------------|-----------------------------|------------------------|-------------------------------|--------------------|---------------------------------------| | Revenue: | | | | | | | | | | Company-operated restaurants $ | 111 ,433 | $ | $ | $ 242,820 | $ | $ | $ | 354,253 $ | | Franchised restaurants and other | 168,244 | 5,579 | | 122,587 | 11,835 | | (17,414) | 290,831 | | Total revenue | 279,677 | 5,579 | | 365,407 | 11 ,835 | | (17,414) | 645,084 | | Operating costs and expenses: | | | | | | | | | | Company-operated restaurants: | | | | | | | | | | Food and packaging | 28,226 | | | 70,215 | | | | 98,441 | | Payroll and other employee benefits | 34,365 | | | 81 ,844 | | | | I 16,209 | | Occupancy and other | 33,772 | | | 80,939 | | | (17,414) | 97,297 | | Total company-operated restaurants | 96,363 | | | 232,998 | | | (17,414) | 311 ,947 | | Franchised restaurants and other | 66,917 | | | 24,089 | | | | 91 ,006 | | Advertising | 6,774 | | | 12,502 | | | | 19,276 | | General and administrative | 6,694 | 23,462 | I | (724) | 26,515 | | | 55,948 | | Facility action charges, net | 526 | | | 3,063 | | | | 3,589 | | Total operating costs and expenses | 177,274 | 23,462 | I | 271 ,928 | 26,515 | | (17,414) | 481 ,766 | | Operating income (loss) | 102,403 | (17,883) | (I) | 93,479 | (14,680) | | | 163,318 | | Interest expense | (1 ,557) | (27,649) | | (6,021) | (27,525) | | | (62,752) | | Other income (loss), net | 1,13 I | 96,478 | 60,645 | 690 | 80,449 | 33,389 | (270,725) | 2,057 | | Income (loss) before income taxes | 101 ,977 | 50,946 | 60,644 | 88,148 | 38,244 | 33,389 | (270,725) | 102,623 | | Income tax expense | 3,282 | | | 1,544 | | | | 4,826 | | Net income (loss) $ | 98,695 | $ 50,946 | $ 60,644 | $ 86,604 | $ 38,244 | $ 33,389 | $ ~270,7251 $ | 97,797 |
THE CKE SECURITIZA TION ENTITIES COMBINING CONSOLIDATING STATEMENT OF OPERATIONS (In thousands)
Fiscal 2022 The CKE Carl's Jr. Carl's Jr. Carl's Jr. SPY Hardee's Hardee's Hardee's SPY Securitization Restaurants LLC FundingLLC Guarantor LLC Restaurants LLC FundingLLC Guarantor LLC Eliminations Entities Revenue: Company-operated restaurants ....................................................... $ I 14,008 $ $ $ 241 ,909 $ $ $ $ 355,917 Franchised restaurants and other .................................................... 166,547 5,699 123,880 11,759 (17,458) 290,427 Total revenue ........................................................................ 280,555 5,699 365,789 11 ,759 (17,458) 646,344 Operating costs and expenses: Company-operated restaurants: Food and packaging .................................................................. 28,251 72,327 100,578 Payroll and other employee benefits ......................................... 33,201 77,325 I 10,526 Occupancy and other. ................................................................ 32,695 72,348 (17,458) 87,585 Total company-operated restaurants .................................... 94,147 222,000 (17,458) 298,689 Franchised restaurants and other .................................................... 68,839 26,809 95,648 Advertising ..................................................................................... 6,990 12,414 19,404 General and administrative ............................................................. 13,775 23,930 (I) (1 ,222) 26,866 63,348 Facility action charges, net ............................................................. (4,4 I I) 1,458 (2,953) Total operating costs and expenses ...................................... 179,340 23,930 (I) 261 ,459 26,866 (17,458) 474,136 Operating income (loss) .........................................
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the consolidated interest expense for the CKE Securitization Entities in fiscal year 2022 was $63,236,000. This figure is the sum of interest expenses across various Carl's Jr. and Hardee's entities, as well as eliminations for consolidated reporting.
Specifically, the interest expense includes $(1,714,000) for Carl's Jr. Restaurants LLC, $(27,220,000) for Carl's Jr. Funding LLC, $(7,107,000) for Hardee's Restaurants LLC, and $(27,195,000) for Hardee's Funding LLC. These individual amounts are combined to arrive at the total interest expense.
For a prospective Carls franchisee, understanding the interest expenses of the overall CKE Securitization Entities can provide insight into the financial structure and debt obligations of the broader organization. While this doesn't directly reflect the franchisee's individual interest expenses, it offers context about the financial health and leverage of Carls's parent entity. Franchisees should consider these figures as part of their due diligence to assess the stability and financial management of the Carls organization.