What was the total amount of other long-term liabilities reported for Carls in 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2025 | $ 16,202 |
|---|---|
| 2026 | 16,212 |
| 2027 | 16,410 |
| 2028 | 17,250 |
| 2029 | 17,813 |
| Thereafter | 66,043 |
| Total minimum lease payments | 149,930 |
| Less amount representing interest | (32,652) |
| Residual property obligation(1), deferred financing costs and deferred sales proceeds | 102,346 |
| Financing method sale-leaseback liability | 219,624 |
| Less current portion | (11,287) |
| Financing method sale-leaseback liability, less current portion | $ 208,337 |
(1) Although we have legally transferred title of the sale-leaseback properties, we have included an obligation to convey, for accounting purposes, the sale-leaseback assets at the end
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total amount of other long-term liabilities reported for 2023 was $277,497. This figure represents the sum of several specific long-term liabilities.
The components of other long-term liabilities include financing method sale-leaseback liability, long-term portion, deferred franchise and development fees, estimated liability for self-insurance, long-term portion, deferred beverage income, unfavorable lease agreements, and other liabilities. For example, the financing method sale-leaseback liability was $219,707 in 2023. The deferred franchise and development fees were $32,566, and the estimated liability for self-insurance was $12,183.
Understanding the composition of these liabilities is crucial for prospective franchisees. These liabilities can impact Carls's financial stability and future obligations. A franchisee should investigate the nature of these liabilities, particularly the sale-leaseback arrangements and self-insurance obligations, to assess any potential risks or impacts on the franchise system.
Franchisees should also compare these figures with previous years and industry benchmarks to evaluate the trend and relative magnitude of these liabilities. This analysis can provide insights into Carls's financial management practices and potential future financial demands.