What was the total facility action charges, net, for Carls in fiscal year 2022?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
| ,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 | — | (1 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, facility action charges, net, are costs associated with restaurants that have carrying values exceeding their fair values, potentially leading to impairment charges. These charges can also arise from closing or refranchising restaurants, or from leasing/subleasing properties.
For Carl's Jr. Restaurants LLC, facility action charges, net, were $526 in fiscal year 2022. For Hardee's Restaurants LLC, these charges were $3,063 in the same year. The total facility action charges, net, for The CKE Securitization Entities, which includes both Carl's Jr. and Hardee's, amounted to $3,589 in fiscal year 2022.
A prospective franchisee should understand that facility action charges can indicate financial distress or strategic changes within the franchise system. While these charges are not directly paid by franchisees, they can reflect the overall health and stability of the Carls brand.
It is important to note that these figures are specific to the entities listed and may not represent the entire Carls organization. A potential franchisee should review the complete financial statements and seek clarification from Carls regarding the factors contributing to these charges and their potential impact on franchise operations.