What does Hardees consider when evaluating whether it is more likely than not that their deferred income tax assets are realizable?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
We evaluate, on a quarterly basis, whether it is more likely than not that our deferred income tax assets are realizable. In performing this analysis, we consider all available evidence, both positive and negative, including historical operating results, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards and potential tax planning strategies that may be employed to prevent NOL or tax credit carryforwards from expiring unused.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the company evaluates on a quarterly basis whether it is more likely than not that their deferred income tax assets are realizable. In performing this analysis, Hardees considers all available evidence, both positive and negative. This includes historical operating results, the estimated timing of future reversals of existing taxable temporary differences, and estimated future taxable income exclusive of reversing temporary differences and carryforwards.
Hardees also considers potential tax planning strategies that may be employed to prevent net operating loss (NOL) or tax credit carryforwards from expiring unused. This comprehensive approach allows Hardees to make informed decisions about the realizability of their deferred income tax assets.
For a prospective franchisee, this indicates that Hardees actively manages its tax position and considers various factors to optimize its tax benefits. Understanding these considerations can provide insight into Hardees's financial management practices and its approach to tax planning.