What was the reported interest expense for Churchs Chicken as of December 31, 2023?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| Dec | cember 31, | De | cember 25, | |
|---|---|---|---|---|
| 2023 | 2022 | |||
| Revenues | ||||
| Sales by company-operated restaurants | S | 156,268 | S | 141,936 |
| Franchise revenue | 58,655 | 54,276 | ||
| Rental and other income | 8,380 | 8,781 | ||
| Total revenues | 223,303 | 204,993 | ||
| Operating costs and expenses | ||||
| Company-operated restaurant expenses: | ||||
| Food, beverage and packaging | 48,155 | 45,690 | ||
| Payroll and benefits | 42,744 | 40,009 | ||
| Other operating expenses | 37,842 | 37,204 | ||
| General and administrative expenses | 21,716 | 22,378 | ||
| Depreciation and amortization | 19,924 | 18,600 | ||
| Impairment, special charges and (gain) loss on asset dispositions | 2,554 | (954) | ||
| Total operating costs and expenses | 172,935 | 162,927 | ||
| Operating income | 50,368 | 42,066 | ||
| Interest expense, net | 28,140 | 26,861 | ||
| Income before income taxes | 22,228 | 15,205 | ||
| Income tax expense | 3,378 | 2,905 | ||
| Net income | S | 18,850 | $ | 12,300 |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 35–43)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, the interest expense, net, as of December 31, 2023, was $28,140. This figure reflects the cost incurred by Churchs Chicken for its debt obligations during that period. This is an important figure for prospective franchisees to consider, as it provides insight into the financial health and debt management of the company.
Understanding the interest expense can help potential franchisees assess the financial stability of Churchs Chicken. A high-interest expense might indicate a significant debt burden, which could impact the company's ability to support its franchisees or invest in growth initiatives. Conversely, a manageable interest expense suggests sound financial management and the capacity to handle its financial obligations.
It is also useful to compare the interest expense from 2023 to the previous year. In 2022, the interest expense was $26,861. The increase of approximately $1,279 in interest expense from 2022 to 2023 could be due to various factors, such as increased borrowing, changes in interest rates, or refinancing of debt. Franchisees should investigate the reasons behind this change to fully understand its implications.