According to Exit's 2025 Franchise Disclosure Document, the deferred provision for income taxes in 2022 was a benefit of $402,000. This figure reflects the change in deferred tax assets and liabilities, which arise from temporary differences between the book and tax bases of assets and liabilities. A deferred tax benefit indicates that Exit expects to pay less in income taxes in the future due to these temporary differences reversing.

For a prospective Exit franchisee, understanding these figures is crucial for assessing the financial health and tax strategies of the company. Deferred tax provisions can significantly impact a company's overall financial performance and cash flow. A deferred tax benefit, such as the one reported for 2022, suggests that Exit has utilized tax planning strategies that could reduce its future tax obligations.

It's important to note that deferred tax assets are subject to evaluation for realizability. If Exit believes that it is more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is established. This allowance reduces the carrying amount of the deferred tax asset. Franchisees should be aware of these valuation allowances, as they can impact the net deferred tax asset reported on Exit's balance sheet.

In 2022, Exit had a net deferred tax asset of $270,000. This figure represents the overall value of deferred tax assets, net of any valuation allowances. Reviewing these figures over several years, as presented in the FDD, provides a more comprehensive understanding of Exit's tax position and its potential impact on future financial performance.