What was the total amount of deferred income tax assets for Hardees in 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| \$ 11,248 |
| State | 2,449 | 3,066 | | Foreign | 6,404 | 5,926 | | | 16,135 | 20,240 | | Deferred: | | | | Federal | (8,988) | (4,512) | | State | (2,857) | 714 | | Foreign | (24) | 60 | | | (11,869) | (3,738) | | Total income tax expense | $ 4,266 | $ 16,502 |
The following is a reconciliation of income tax expense at the federal statutory rate of 21.0% to our income tax expense for fiscal 2025 and 2024, respectively:
| Income tax expense at statutory rate | $ | 5,262 | $ 12,942 |
|---|---|---|---|
| State income taxes, net of federal income tax effec |
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the total deferred income tax assets in 2024 amounted to $174,636. This figure represents the sum of various deferred tax assets, including those related to operating lease liabilities ($115,175), financing method sale-leaseback obligations ($32,229), interest limitation carryforward ($13,345), reserves and allowances ($5,546), franchise fees ($7,803), net operating loss carryforwards ($4,749), and federal and state tax credits ($4,536). It also factors in a valuation allowance of ($8,747).
Deferred income tax assets arise from temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss and tax credit carryforwards. These assets are essentially future tax benefits that Hardees expects to realize. However, the valuation allowance indicates that Hardees has determined it is more likely than not that a portion of these assets may not be realized, reducing the recognized value of the deferred tax assets.
For a prospective Hardees franchisee, understanding these figures is crucial for assessing the financial health and tax planning strategies of the company. Deferred tax assets can be a valuable resource, but the valuation allowance suggests some uncertainty about their future realization. Franchisees should consider these factors when evaluating the overall financial stability and potential tax implications associated with investing in a Hardees franchise.