What was the total share-based compensation expense for Carls in fiscal year 2023?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
-------------------|-------------|-------------| | Impairment of assets to be disposed of | $ 3,311 | $ 3,657 | | | | | | Closed store expenses | 2,219 | 219 | | Impairment of assets to be held and used | 1,044 | 444 | | (Gain) loss on disposal of other property and equipment | (3,503) | 512 | | Gain on refranchising transaction | (153) | — | | Other (gains) losses, net | (66) | 1,130 | | Gain on early termination of lease agreement associated with a financing method s
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the total share-based compensation expense for fiscal year 2023 was $777. This figure represents the total expense recognized by Carls for equity-based awards granted to its executive management team, key employees, and directors under its equity-based compensation plans. These awards are measured at fair value on the grant date and expensed over the service period.
The share-based compensation includes expenses related to profit-sharing interests with and without performance conditions. For fiscal year 2023, the expense for profit-sharing interests with performance conditions is not explicitly detailed in the provided table but the total share-based compensation expense is stated as $777. This indicates the overall cost to Carls for providing equity-based incentives to its employees and directors.
It is important to note that during fiscal year 2023, Carls recorded reversals of $123 of share-based compensation expense due to the forfeiture of profit-sharing interests. This means that while the total expense was $777, there were adjustments made due to certain employees or directors no longer meeting the conditions to receive their share-based compensation. This can be a common occurrence in companies with share-based compensation plans, as employee turnover or failure to meet performance targets can lead to forfeitures and subsequent adjustments to the expense recognized.
Prospective franchisees should understand that share-based compensation is a non-cash expense, meaning it does not directly impact the company's cash flow. However, it does reflect the value of equity-based incentives provided to employees and can impact the company's profitability. While this expense is not directly related to the operations of a franchised unit, it provides insight into the company's overall financial management and compensation practices.