What were the charge-offs related to credit losses for Hardees in Fiscal Year 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ive tax rate reconciliation. The standard also requires annual disclosure of income taxes paid disaggregated by federal, state and foreign taxes. The standard is effective for annual reporting periods beginning after December 15, 2024 for public entities. For other entities, the standard is effective for annual reporting periods beginning after December 15, 2025. Early a
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the charge-offs related to credit losses in fiscal year 2024 were $(897). This figure represents the amount of uncollectible receivables that Hardees wrote off during that fiscal year. These charge-offs are related to the accounts receivable from franchisees, which primarily consist of royalties, franchise fees, and rent.
Hardees records provisions for estimated credit losses when they believe franchisees are unable to make required payments. This indicates that Hardees actively monitors the financial health of its franchisees and makes adjustments to account for potential losses. The FDD also mentions that Hardees may take several actions to mitigate franchise collection issues, such as reducing or deferring royalties or rent, or even acquiring the restaurants or terminating the franchise agreement if necessary.
For a prospective Hardees franchisee, this information highlights the importance of maintaining a strong financial position and meeting payment obligations. While Hardees has strategies to manage credit risk, significant franchisee financial distress can lead to charge-offs, impacting the overall financial performance of the Hardees organization. Understanding the factors that contribute to these credit losses and the measures Hardees takes to address them can be valuable for potential franchisees.