For the year ended January 3, 2022, what was the total income tax expense (benefit) for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
rations:
| For the | Periods | For the Years Ended | ||||
|---|---|---|---|---|---|---|
| June 17, 2023 through January 1, 2024 (Successor) | January 3, 2023 through June 16, 2023 (Predecessor) | January 2, 2023 (Predecessor) | January 3, 2022 (Predecessor) | |||
| Federal income tax benefit computed at statutory rate | $ (20,786) | $ (5,617) | $ (2,157) | |||
| State and local income tax benefit, net of federal income tax benefit | (20) | (3,871) | (907) | (804) | ||
| Permanent differences and other | 397 | 2,203 | 139 | (1,369) | ||
| Unrecognized tax benefits | . | 10 | 9 | 8 | ||
| Other | 16 | 1,778 | (7) | 104 | ||
| Deferred taxasset write-off | 2,366 | 3 5 8 | ||||
| State accrual changes | ( + 0) | 544 | (1,458) | (695) | ||
| State tax rate change | • | (17) | (1,867) | 120 | ||
| Change in deferred tax asset valuation allowance | 641 | 10,231 | 6,756 | 4,707 | ||
| Total income tax expense (benefit) | $ 540 | $ (7,542) | $ (2,952) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the total income tax expense (benefit) for the year ended January 3, 2022, was a benefit of $(206). This means that Checkersrallys experienced a net reduction in its income tax liability for that period.
Several factors contributed to this total income tax benefit. These include the federal income tax benefit computed at the statutory rate of $(2,157), a state and local income tax benefit, net of federal income tax benefit of $(804), and permanent differences and other expenses of $(1,369). These benefits were partially offset by items such as a deferred tax asset write-off of 358, other expenses of 104, and a change in deferred tax asset valuation allowance of 4,707.
For a prospective franchisee, understanding these figures provides insight into how Checkersrallys manages its tax obligations and the various components that influence its overall tax position. While this historical data is useful, it's important to recognize that tax laws and the company's financial performance can change, impacting future tax liabilities or benefits. Franchisees should consult with financial advisors to understand the tax implications specific to their individual circumstances and franchise operations.