What is the present value of leases receivable for Hardees finance leases as of fiscal year 2025?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
property taxes. The carrying values of assets leased to others as of January 31, 2024 and 2023 are as follows:
| | 2024 | 2023 | |------------------------------------------------|---------------|---------------| | Land | $ 104,028 | $ 118,730 | | Leasehold improvements | 3,916 | 8,285 | | Buildings and improvements | 68,563 | 88,190 | | | 176,507 | 215,205 | | Less accumulated depreciation and amortization | (57,231) | (72,873) | | Total assets leased to others | $ 119,276 | $ 142,332 | The components of lease income for January 31, 2024 and 2023 are as follows:
| 2024 | 2023 | |||
|---|---|---|---|---|
| Rent revenue: | ||||
| Minimum rent revenue | $ | 90,450 | $ | 94,426 |
| Variable lease payments | 6,700 | 6,875 | ||
| Total rent revenue | $ | 97,150 | $ | 101,3 |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the present value of leases receivable for finance leases is $964 as of the fiscal year 2025. This value represents the current worth of future lease payments that Hardees expects to receive from its franchisees or other parties related to finance leases. This figure is calculated by discounting the future lease payments to their present value using an appropriate interest rate, reflecting the time value of money. The total future minimum lease and sublease rent revenue is $1,193, but when unearned interest income of $(229) is factored in, the present value is $964. The current portion of these leases receivable is $(180), leaving leases receivable less current portion at $784.
For a prospective Hardees franchisee, understanding the present value of leases receivable can provide insight into the financial health and leasing activities of the franchisor. It indicates the amount Hardees anticipates collecting from existing lease agreements. This information is useful in assessing the stability and potential revenue streams of the company, which indirectly affects the support and resources available to franchisees.
It's important to note that this figure pertains specifically to finance leases and subleases, and it does not include operating leases or owned properties. The FDD also provides a breakdown of future minimum lease payments for subsequent years, allowing for a more comprehensive understanding of Hardees's long-term lease revenue expectations. Reviewing these figures in conjunction with other financial metrics can offer a more complete picture of the company's financial position.