How does Crepe De Licious account for income taxes?

According to the 2025 Crepe De Licious Franchise Disclosure Document, the company accounts for income taxes in two ways: current and deferred. For current income taxes, Crepe De Licious provides for income taxes based on amounts reportable for income tax purposes. For deferred income taxes, the recognition of income and expenses in different periods for financial accounting and income tax purposes gives rise to timing differences that result in deferred income taxes.

In 2024, the current income taxes were $26,895, while in 2023, they were $56,181. The deferred income taxes were a reduction of $5,300 in 2024 and a reduction of $14,600 in 2023. The total provision for income taxes was $21,595 in 2024 and $41,581 in 2023. These figures reflect the actual income tax obligations and the adjustments made for future tax liabilities or assets.

For a prospective Crepe De Licious franchisee, understanding these accounting practices is crucial for interpreting the financial statements provided in the FDD. It demonstrates how the franchisor manages its tax obligations and provides insight into the company's financial health. Franchisees should consult with a financial advisor to fully understand the implications of these tax accounting methods on their own potential investment and business operations.