What was the accumulated amortization for Hardees' favorable lease agreements in 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
---|-----|-----------|----|-----------| | Allowance for credit losses, beginning of year | $ | 2,375 | $ | 2,033 | | Provision | | 3,246 | | 2,133 | | Recoveries | | (526) | | (894) | | Charge-offs | | (416) | | (897) | | Allowance for credit losses, end of year | $ | 4,679 | $ | 2,375 |
NOTE 4 — PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of the
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the accumulated amortization related to finance leases was $333 as of January 31, 2024. This figure represents the total amount of amortization that has been recognized on Hardees' finance leases up to that date. Amortization is the systematic allocation of the cost of an intangible asset (in this case, finance leases) over its useful life.
For a prospective Hardees franchisee, understanding accumulated amortization is crucial for assessing the financial health and obligations of the franchise system. It provides insight into how the value of leased assets is being recognized over time. This information can be used to evaluate the long-term financial implications of lease agreements and their impact on the franchisee's profitability.
It is important to note that this figure pertains specifically to finance leases. Finance leases are leases that transfer substantially all the risks and rewards of ownership to the lessee (Hardees). The FDD also mentions that depreciation and amortization expense related to property and equipment for fiscal 2024 was $36,202, which includes amortization of property under finance leases. This indicates that the total amortization expense is broader than just the accumulated amortization of finance leases, encompassing other property and equipment as well.