What was Hardees' estimated liability for self-insurance as of January 31, 2023?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ngible asset and measure the amount of impairment, if any.
Our definite-lived intangible assets consist of franchise agreements and favorable lease agreements and are amortized on a straight-line basis over their estimated useful lives. Our definite-lived intangible assets are tested for impairment when events or circumstances indicate the carrying value may be impaired. Refer to discussion of facility action charges for a discussion of impairment of restaurant-level long-lived assets.
Deferred Financing Costs
Deferred financing costs are capitalized and amortized, utilizing the effective interest method, as a component of interest expense over the terms of the respective
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, as of January 31, 2023, Hardees' estimated liability for self-insurance was $17,996. The company is self-insured for a portion of losses related to workers' compensation, general liability, and auto liability claims.
Hardees establishes these self-insurance liabilities with the help of actuaries. These actuaries use assumptions based on the average historical losses on claims, historical claim loss development, and estimates of unpaid losses for each loss category. The claims are discounted using an estimated risk-free interest rate of 2.5% as of January 31, 2024.
It's important to note that the estimated liability for self-insurance can fluctuate. For example, the document indicates that the estimated liability decreased from $17,996 as of January 31, 2023, to $13,113 as of January 31, 2024, and further to $12,134 as of January 31, 2025. These changes could be due to a variety of factors, including changes in claim frequency, changes in the cost of claims, and changes in the estimated risk-free interest rate.