What was the total amount of repayments of financing method sale-leaseback obligations for Hardees in fiscal year 2023?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
| Rent expense: | | | | | | Operating lease cost | (92,3 | 40) | | (93,249) | | Variable lease cost | (1,8 | 54) | | (1,391) | | Total operating lease cost | (94,1 | 94) | | (94,640) | | Net rent income | $ 2,9 | 56 | $ | 6,661 |
Lease Term and Discount Rate as of January 31,
Weighted-average remaining lease term:
| 2024 | 2023 | |
|---|---|---|
| Finance leases | 12.11 years | 10.19 years |
| Operating leases | 7.67 years | 7.89 years |
| Weighted-average discount rate: | ||
| 2024 | 2023 | |
| Finance leases | 6.5 % | 8.1 % |
| Operating leases | 2.4 % | 1.8 % |
NOTE 10 — SALE-LEASEBACK TRANSACTIONS
We currently have entered into agreements with independent third parties under which we sold and leased back a total of 126 restaurant properties. The initial minimum lease terms are 20 years and include renewal options. The leases also include provisions that provide us with the ability to repurchase the properties, which for accounting purposes, preven
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the repayments of financing method sale-leaseback obligations are not explicitly detailed. However, the document does state that rent payments for these leases are recorded as principal and interest.
The FDD includes information on Hardees's sale-leaseback transactions, where Hardees sold and leased back restaurant properties. As of January 31, 2024, Hardees had agreements with independent third parties for 126 restaurant properties. The initial minimum lease terms are 20 years and include renewal options. These leases also allow Hardees the option to repurchase the properties.
The financial statements provide future minimum lease commitments, but do not break down the actual repayments made during fiscal year 2023. Instead, the FDD provides the net book value of associated assets and mentions a net gain recognized from the termination of lease agreements for two properties during fiscal year 2023. A prospective franchisee should inquire about the specific amount of principal and interest paid during fiscal year 2023 to fully understand the cash flow implications of these lease obligations.