What was the total amount spent on occupancy and other expenses for company-operated restaurants by Carl's Jr. Restaurants LLC?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
28 | | Operating leases, less current portion | 269,290 | — | — | 80,987 | — | — | — | 350,277 | | Other long-term liabilities | 68,431 | (1) | — | 194,080 | — | — | — | 262,510 | | Total liabilities | 416,763 | 622,561 | — | 326,751 | 592,747 | — | (79,292) | 1,879,530 | | Members' equity (deficit): | | | | | | | | | | Members' equity (deficit) | 402,040 | (584,635) | — | 525,624 | (591,535) | — | — | (248,506) | | Total liabilities and members' deficit $ | 818,803 $ | 37,926 $ | — $ | 852,375 $ | 1,212 $ | — $ | (79,292) $ | 1,631,024 |
THE CKE SECURITIZATION ENTITIES COMBINING CONSOLIDATING STATEMENT OF OPERATIONS (In thousands)
Fiscal 2024
| Carl's Jr. Restaurants LLC | Carl's Jr. Funding LLC | Carl's Jr. SPV Guarantor LLC | Hardee's Restaurants LLC | Hardee's Funding LLC | Hardee's SPV Guarantor LLC | Eliminations | The CKE Securitization Entities | |||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue: | ||||||||||
| Company-operated restaurants | $ 112,928 $ | — $ | — $ | 255,914 $ | — $ | — $ | — $ | 368,842 | ||
| Franchised restaurants and other | 175,402 | 5,643 | — | 117,311 | 12,594 | — | (18,237) | 292,713 | ||
| Total revenue | 288,330 | 5,643 | — | 373,225 | 12,594 | — | (18,237) | 661,555 | ||
| Operating costs and expenses: | ||||||||||
| Company-operated restaurants: | ||||||||||
| Food and packaging | 28,645 | — | — | 69,234 | — | — | — | 97,879 | ||
| Payroll and other employee benefits | 34,371 | — | — | 88,269 | — | — | — | 122,640 | ||
| Occupancy and other | 36,600 | — | — | 86,253 | — | — | (18,237) | 104,616 | ||
| Total company-operated restaurants | 99,616 | — | — | 243,756 | — | — | (18,237) | 325,135 | ||
| Franchised restaurants and other | 68,884 | — | — | 24,742 | — | — | — | 93,626 | ||
| Advertising | 6,889 | — | — | 13,837 | — | — | — | 20,726 | ||
| General and administrative | (2,038) | 24,442 | — | 213 | 25,336 | — | — | 47,953 | ||
| Facility action charges, net | (1,128) | — | — | 3,311 | — | — | — | 2,183 | ||
| Total operating costs and expenses | 172,223 | 24,442 | — | 285,859 | 25,336 | — | (18,237) | 489,623 | ||
| Operating income (loss) | 116,107 | (18,799) | — | 87,366 | (12,742) | — | — | 171,932 | ||
| Interest expense | (1,460) | (27,431) | — | (5,652) | (27,320) | — | — | (61,863) | ||
| Other income (loss), net | 3,589 | 112,499 | 61,153 | 406 | 81,860 | 36,915 | (291,632) | 4,790 | ||
| Income (loss) before income taxes | 118,236 | 66,269 | 61,153 | 82,120 | 41,798 | 36,915 | (291,632) | 114,859 | ||
| Income tax expense | 4,453 | — | — | 1,461 | — | — | — | 5,914 | ||
| Net income (loss) | $ 113,783 $ | 66,269 $ | 61,153 $ | 80,659 $ | 41,798 $ | 36,915 $ | (291,632) $ | 108,945 | ||
THE CKE SECURITIZATION ENTITIES COMBINING CONSOLIDATING STATEMENT OF OPERATIONS (In thousands)
Fiscal 2023
| Carl's Jr. Restaurants LLC | Carl's Jr. Funding LLC | Carl's Jr. SPV Guarantor LLC | Hardee's Restaurants LLC | Hardee's Funding LLC | Hardee's SPV 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 | 32,897 | — | — | 80,466 | — | — | — | 113,363 |
| Occupancy and other | 35,240 | — | — | 82,317 | — | — | (17,414) | 100,143 |
| 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 | 1 | (724) | 26,515 | — | — | 55,948 |
| Facility action charges, net | 526 | — | — | 3,063 | — | — | — | 3,589 |
| Total operating costs and expenses | 177,274 | 23,462 | 1 | 271,928 | 26,515 | — | (17,414) | 481,766 |
| Operating income (loss) | 102,403 | (17,883) | (1) | 93,479 | (14,680) | — | — | 163,318 |
| Interest expense | (1,557) | (27,649) | — | (6,021) | (27,525) | — | — | (62,752) |
| Other income (loss), net | 1,131 | 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 $ | (270,725) $ | 97,797 |
Carl's Jr. SPY Guarantor LLC and subsidiaries, and Hardee's SPY Guarantor LLC and subsidiaries (the "CKE Securitization Entities")
Combined Consolidated Financial Statements for the fiscal years ended January 30, 2023 and January 31, 2022
(With Independent Auditors' Report Thereon)
KPMG LLP 1201 Demonbreun Street Suite 1100 Nashville, TN 37203
Independent Auditors' Report
Managing Member Carl's Jr. SPV Guarantor LLC and Hardee's SPV Guarantor LLC:
Opinion
We have audited the combined consolidated financial statements of Carl's Jr. SPV Guarantor LLC and its subsidiaries, and Hardee's SPV Guarantor LLC and its subsidiaries (the Company), which comprise the combined consolidated balance sheets as of January 30, 2023 and January 31 , 2022, and the related combined consolidated statements of income, members' deficit, and cash flows for each of the fiscal years then ended, and the related notes to the combined consolidated financial statements.
In our opinion, the accompanying combined consolidated financial statements present fairly, in all material respects , the financial position of the Company as of January 30, 2023 and January 31 , 2022, and the results of its operations and its cash flows for each of the fiscal years then ended in accordance with U.S. generally accepted accounting principles.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, Carl's Jr. Restaurants LLC's expenses for occupancy and other related costs for company-operated restaurants are detailed in the financial statements. In one instance, the expenses totaled $35,240. In another instance, the expenses totaled $33,772. In a third instance, the expenses totaled $36,600.
These figures represent the costs associated with maintaining and operating the physical locations of Carl's company-owned restaurants. Occupancy costs typically include rent, utilities, property taxes, and insurance. Other expenses could cover maintenance, repairs, and various operational overheads.
Prospective franchisees should consider these expenses when evaluating the potential profitability of a Carls franchise. While franchisees will operate independently, understanding the cost structure of company-operated restaurants can provide valuable insights into the types and magnitude of expenses they may encounter. It's important to note that these figures are specific to company-operated restaurants and may not directly translate to franchised locations due to differences in lease agreements, operational efficiencies, and local market conditions.
It is important for potential franchisees to conduct thorough due diligence, including reviewing the complete financial statements and consulting with existing franchisees, to gain a comprehensive understanding of the costs associated with operating a Carls franchise.