What is the financing method sale-leaseback liability, less current portion, for Hardees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
which is included in property and equipment, net of accumulated depreciation and amortization, in our accompanying Combined Consolidated Balance Sheets was $113,775 and $115,805 as of January 31, 2025 and 2024, respectively.
During fiscal 2025, the lease agreements for one of our restaurant properties was terminated. As we no longer have involvement in the properties, we recognized a net gain of $1,086 associated with the write-off of the assets and liabilities. The net gain is included in facility action charges, net in our accompanying Combined Consolidated Statements of Income.
Closing costs and other fees
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the financing method sale-leaseback liability, less the current portion, is $196,207. This figure represents the long-term financial obligation Hardees has related to properties they have sold and then leased back. The current portion, which has already been subtracted, refers to the amount of the liability due within the next year.
Sale-leaseback transactions are a way for Hardees to free up capital by selling properties while still retaining the use of those properties through a lease agreement. This arrangement allows Hardees to receive an immediate influx of cash, which can be used for other business purposes such as expansion or debt reduction. The lease payments then become an ongoing expense.
The sale-leaseback liability represents the present value of the future lease payments Hardees is obligated to make under these agreements, minus any interest and the current portion. For a prospective franchisee, this indicates the financial strategy Hardees employs to manage its real estate assets and liabilities. It's important to note that these liabilities are the responsibility of Hardees as the franchisor, and not directly the responsibility of individual franchisees.