What was the reported value of Hardees' operating lease liabilities in 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
23 | 481,766 | | Operating income | 171,932 | 163,318 | | Interest expense | (61,863) | (62,752) | | Other income, net | 4,790 | 2,057 | | Income before income taxes | 114,859 | 102,623 | | Income tax expense | 5,914 | 4,826 | | Net income | $ 108,945 | $ 97,797 |
THE CKE SECURITIZATION ENTITIES COMBINED CONSOLIDATED STATEMENTS OF MEMBERS' DEFICIT (In thousands)
| Balance as of January 31, 2022 | $ (251,817) |
|---|---|
| Capital contributions | 45,394 |
| Distributions to members | (139,428) |
| Net income | 97,797 |
| Cumulative effect of change in accounting principle (Note 9) | (452) |
| Balance as of January 31, 2023 | (248,506) |
| Capital contributions | 35,679 |
| Distributions to members | (133,746) |
| Net income | 108,945 |
| Balance as of January 31, 2024 | $ (237,628) |
THE CKE SECURITIZATION ENTITIES COMBINED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
| Fiscal 2024 | Fiscal 2023 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | . $ 108,945 | $ 97,797 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | . 46,692 | 44,580 |
| Amortization of deferred financing costs | . 3,419 | 3,352 |
| Gain on early termination of lease agreement associated with a financing method sale-leaseback restaurant property | . — | (1,285) |
| Gain on refranchising transaction | . (817) | _ |
| (Gain) loss on disposal of other property and equipment | . (602) | 512 |
| Provision for losses on impairments, accounts receivable and other items, net | 4,806 | 318 |
| Net changes in operating assets and liabilities: | ||
| Receivables, inventories, prepaid expenses and other current and non-current assets | . (1,985) | 4,247 |
| Accounts payable and other current and long-term liabilities | . (3,089) | (13,013) |
| Operating lease assets and liabilities, net | . 1,096 | 511 |
| Net cash provided by operating activities | . 158,465 | 137,019 |
| Cash flows from investing activities: | ||
| Proceeds from refranchising transactions | . 2,092 | _ |
| Proceeds from sale of other |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the net value of operating lease assets and liabilities for fiscal year 2024 was $1,096. This figure represents the net change in these assets and liabilities, not the total value of the liabilities themselves. It is an adjustment used in reconciling net income to net cash provided by operating activities.
This number is part of the broader financial picture of Hardees, reflecting how lease-related activities impacted the company's cash flow during the specified period. For a prospective franchisee, understanding these figures is crucial for assessing the financial health and stability of the franchisor. It provides insight into how Hardees manages its lease obligations and how these obligations affect its overall financial performance.
It's important to note that this value represents the change in operating lease assets and liabilities, not the total outstanding lease liability. Franchisees should seek clarification from Hardees regarding the total value of their lease obligations to fully understand the company's financial commitments and how they might affect the franchisee's own operations and profitability.