What was the carrying amount of the Series 2020-1 Class A-2 Notes for Hardees in 2025?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------|---------------|---------------| | Financing method sale-leaseback liability, long-term portion | $ 196,207 | $ 208,337 | | Deferred franchise and development fees | 31,004 | 32,487 | | Deferred beverage income | 5,391 | 5,721 | | Unfavorable lease agreements | 2,714 | 4,132 | | Other | 154 | 124 | | Total other long-term liabilities | $ 235,470 | $ 250,801 |
NOTE 12 — MEMBERS' DEFICIT
During fiscal 2025 and 2024, the CKE Securitization Entities received capital contributions of $36,922 and $35,679, respectively, consisting principally of property and equipment and assets associated with the CKE Res
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the carrying amount of the Series 2020-1 Class A-2 Notes was $362,842. This figure represents the book value of the debt on Hardees's balance sheet as of a specific date in 2025. The carrying amount reflects the original principal amount of the notes, adjusted for any amortization of discount or premium, and any write-downs.
For a prospective Hardees franchisee, understanding the carrying amount of these notes provides insight into the financial obligations of Hardees's parent company. While franchisees are not directly liable for this debt, the financial health of the parent company can impact the resources available for supporting the franchise system. For instance, a heavily indebted parent company might reduce investments in marketing, training, or technology upgrades, which could affect the profitability of individual Hardees franchise locations.
The Series 2020-1 Class A-2 Notes were issued with an initial principal amount of $400,000. These notes were issued to pay down the entire outstanding principal balance of the Series 2018-1 Class A-2-I Notes. The Series 2020-1 Class A-2 Notes require scheduled quarterly principal payments of $1,000 with the first principal payment due March 22, 2021. The interest payments for the Series 2020-1 Class A-2 Notes are due quarterly in arrears on the 20th day of each March, June, September and December.
It is important for potential franchisees to consider these financial liabilities as part of their due diligence. While the FDD provides a snapshot of these figures, franchisees should consider consulting with a financial advisor to fully understand the implications of the parent company's debt on their potential investment. Reviewing the trend of these carrying amounts over time, as presented in the FDD, can also offer valuable insights into the company's debt management and overall financial stability.