What was the amount from proceeds from refranchising transactions for Hardees during fiscal year 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Loss | Total Equity | |||||
|---|---|---|---|---|---|---|
| Balance as of January 31, 2023 | 100 | $ | $ 734,314 | $ (540,277) | $ (1,135) | $192,902 |
| Share-based compensation | _ | 2,124 | _ | _ | 2,124 | |
| Other comprehensive loss | _ | _ | (22) | (22) | ||
| Net Income | 45,129 | 45,129 | ||||
| Balance as of January 31, 2024 | 100 | _ | 736,438 | (495,148) | (1,157) | 240,133 |
| Share-based compensation | _ | 444 | _ | _ | 444 | |
| Other comprehensive income | _ | _ | _ | 1,102 | 1,102 | |
| Other loss | 88 | _ | 88 | |||
| Cash dividends to CKE Holding Corporation | _ | _ | _ | (90,000) | _ | (90,000) |
| Net income | _ | _ | 20,791 | _ | 20,791 | |
| Balance as of January 31, 2025 | 100 | $ | $ 736,970 | $ (564,357) | $ (55) | $172,558 |
CKE RESTAURANTS HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
| Fiscal 2025 | Fiscal 2024 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | $ 20,791 | $ 45,129 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 52,776 | 51,372 |
| Amortization of deferred financing costs | 3,499 | 3,417 |
| Loss on early extinguishment of Series 2018-1 Class A-2-II Notes | 1,283 | _ |
| Share-based compensation | 444 | 2,124 |
| Gain on early termination of lease agreement associated with a financing method sale-leaseback restaurant property | (1,386) | _ |
| Gain on refranchising transaction | _ | (153) |
| Gain on disposal of other property and equipment. | (2,635) | (602) |
| Deferred income taxes | (11,869) | (3,738) |
| Provision for losses on impairments, accounts receivable and other items, net | 11,625 | 508 |
| Net changes in operating assets and liabilities: | ||
| Receivables, inventories, prepaid expenses and other current and non-current assets | (15,444) | (14,140) |
| Estimated liability for self-insurance | (1,009) | (1,253) |
| Accounts payable and other current and long-term liabilities | (2,264) | 7,604 |
| Operating lease asset and liabilities, net | (241) | 581 |
| Net cash provided by operating activities. | 90,849 | |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (36,620) | (35,514) |
| Acquisitions of restaurants, net of cash received | (3,019) | |
| Proceeds from refranchising transactions | _ | 2,092 |
| Proceeds from sale of other property and equipment | 8,128 | 2,346 |
| Other investing activities | 219 | (7,346) |
| Net cash used in investing activities | (28,384) | (41,441) |
| Cash flows from financing activities: | ||
| Net change in book overdraft | (298) | (1,472) |
| Repayments of Class A- |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the proceeds from refranchising transactions during fiscal year 2024 amounted to $2,092. This figure represents the cash inflow Hardees received from selling existing restaurant locations to franchisees. This activity is part of Hardees's broader strategy of optimizing its restaurant portfolio through refranchising.
For a prospective Hardees franchisee, this indicates that Hardees is actively involved in refranchising, which could present opportunities to acquire existing, operating restaurants rather than building new ones from the ground up. Acquiring an existing restaurant can sometimes be less capital-intensive and may offer a quicker path to profitability, as the location already has an established customer base and operational history.
However, it's important for potential franchisees to investigate the reasons behind these refranchising transactions. Understanding why Hardees is selling these locations—whether it's part of a strategic realignment, a desire to reduce corporate overhead, or other factors—can provide valuable insights into the potential risks and rewards of acquiring a refranchised unit. Additionally, franchisees should carefully evaluate the financial performance and condition of any refranchised restaurant before making a purchase decision.
It is also worth noting that the gain on refranchising transaction was ($153) during fiscal year 2024. This gain is factored into the cash flows from operating activities, indicating its impact on the overall financial health of Hardees. This gain represents the profit Hardees recognized from the sale of the restaurant, after accounting for the net book value of the assets sold.