What is the purpose of the notes to Del Taco's consolidated financial statements?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
CADF9<9BG=J9@CGG | V | V | V | V | | V | | | 5@5B795H,9DH9A69F | | | | | | | | | | | | | | | | | | | | | | | | | | ,99577CAD5BM=B;BCH9GHC7CBGC@=85H98:=B5B7=5@GH5H9A9BHG
JACK IN THE BOX INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of operations — Jack in the Box Inc. (the "Company"), together with its consolidated subsidiaries, develops, operates, and franchises quick-service restaurants under the Jack in the Box® and Del Taco® restaurant brands.
On March 8, 2022, the Company acquired Del Taco Restaurants, Inc. ("Del Taco") for cash according to the terms and conditions of the Agreement and Plan of Merger, dated as of December 5, 2021. Del Taco is a nationwide operator and franchisor of restaurants featuring fresh and fast Mexican and American inspired cuisines. Refer to Note 3, Business Combination, for further details.
As of September 29, 2024, there were 150 company-operated and 2,041 franchise-operated Jack in the Box restaurants and 133 company-operated and 461 franchise-operated Del Taco restaurants.
References to the Company throughout these notes to the consolidated financial statements are made using the first-person notations of "we," "us," and "our."
Basis of presentation — The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC").
Fiscal year — The Company's fiscal year is the 52 or 53 weeks ending the Sunday closest to September 30. In fiscal 2023, Del Taco operated on a fiscal year ending the Tuesday closest to September 30. Beginning fiscal 2024, Del Taco's fiscal year shifted to align with Jack in the Box. As a result, Del Taco's fiscal 2024 results include two fewer days. Comparisons throughout these note
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to the 2025 FDD, the notes to Del Taco's consolidated financial statements provide additional details and explanations regarding the financial figures presented in the main statements. These notes offer context and clarification on various aspects of Del Taco's financial performance and position.
Specifically, the notes cover topics such as the nature of operations, significant accounting policies, details of the business combination with Del Taco Restaurants, Inc., franchise acquisitions, refranchising activities, and information on assets held for sale. They also provide insights into the company's debt structure, including revolving credit facilities, bridge commitment letters, and maturities of long-term debt. Furthermore, the notes explain how the acquisition of Del Taco was funded and the related transaction costs.
For a prospective Del Taco franchisee, understanding these notes is crucial for a comprehensive understanding of the brand's financial health and accounting practices. For instance, details about debt maturities and credit facilities can indicate the company's financial stability and its ability to invest in the brand's growth. Similarly, information on franchise acquisitions and refranchising can provide insights into the company's strategy for expanding its franchise network. The notes also clarify how certain figures are calculated, such as the unaudited pro forma financial information, which is adjusted to show the impact of the Del Taco acquisition as if it had occurred at the beginning of fiscal year 2021.
Overall, the notes to the consolidated financial statements serve to enhance the transparency and understandability of Del Taco's financial reporting, providing stakeholders, including potential franchisees, with a more complete picture of the company's financial condition and performance.