What was the reported total finance lease cost for Hardees in fiscal year 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
ed as lease receivables and are included in accounts receivable, net and other assets, net in our accompanying Consolidated Balance Sheets. As of January 31, 2024, future minimum lease and sublease rent revenue expected to be received, are as follows:
| Finance Leases | Operating Leases | ||||||
|---|---|---|---|---|---|---|---|
| Subleases | Subleases | Owned Properties | |||||
| Fiscal: |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the total finance lease cost for fiscal year 2024 was $3,170. This figure is comprised of several components, including amortization of finance lease assets, which amounted to $1,596, and interest on finance lease liabilities, which totaled $1,572. Additionally, there was a variable lease cost of $2 included in the total finance lease cost.
Finance leases represent a method of financing where Hardees essentially leases assets with the intention of owning them at the end of the lease term. The amortization of finance lease assets reflects the depreciation of these assets over their useful life, while the interest on finance lease liabilities represents the cost of borrowing associated with these leases. The variable lease cost may fluctuate based on factors such as usage or other variables defined in the lease agreement.
For a prospective Hardees franchisee, understanding these finance lease costs is crucial, as they represent a significant financial obligation. These costs can impact the overall profitability of the franchise and should be carefully considered when evaluating the financial viability of the investment. Franchisees should inquire about the specific assets covered under finance leases, the terms of the lease agreements, and any potential fluctuations in variable lease costs to accurately assess their financial obligations.
It's also important to note that Hardees also incurred operating lease costs, which are distinct from finance leases. In fiscal year 2024, the operating lease cost was $92,340, with an additional $1,854 in variable lease costs, bringing the total operating lease cost to $94,194. When combined, the total lease cost for Hardees in fiscal year 2024 was $97,364. These figures provide a comprehensive view of Hardees's leasing expenses and should be analyzed in conjunction with other financial data to gain a complete understanding of the company's financial performance.