What is the total estimated future amortization income for Hardees' deferred franchise fees?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
n or loss on disposal. If we sublease a restaurant to a franchisee on terms that result in a probable loss, then we will establish a lease subsidy allowance and record a loss at the time we enter into the lease arrangement. As fur
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees' 2025 Franchise Disclosure Document, the total estimated future amortization income is $35,941. This income is broken down by fiscal year, with $3,454 estimated for 2025, $3,018 for 2026, $2,801 for 2027, $2,665 for 2028, $2,546 for 2029, and $21,457 thereafter.
Deferred franchise fees represent initial franchise fees that Hardees collects from franchisees. These fees are not recognized as income immediately but are instead deferred and recognized over the term of the franchise agreement. This accounting practice aligns the revenue recognition with the period during which Hardees provides ongoing services and support to the franchisee.
For a prospective Hardees franchisee, understanding the amortization of these fees provides insight into Hardees' revenue recognition practices. It also highlights the company's financial stability and long-term financial planning. The consistent amortization schedule suggests a stable and predictable revenue stream for Hardees over the coming years. Franchisees may want to inquire about the specific terms of the franchise agreement that dictate the amortization schedule and the services provided by Hardees that justify the deferral of these fees.