What was the total interest expense for Hardees related to financing method sale-leaseback obligations in fiscal year 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
recorded a loss on early extinguishment of debt of $1,283 during fiscal 2025, which was comprised of the write-off of the Series 2018-1 Class A-2-II Notes unamortized deferred financing costs. The loss is included in other income, net in the Combined Consolidated Statements of Income.
Debt issuance costs
In connection with the Series 2024-1 Refinancing and the amendment of the Series 2018-1 Variable Funding Notes, we incurred debt issuance costs of $7,860, which were capitalized and allocated between the Series 2024-1 Class A-2 Notes and the Series 2018-1 Variable Funding Notes. These deferred financing costs will be amortized to
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the interest expense related to financing method sale-leaseback obligations for fiscal year 2024 was $5,793. This figure represents the interest Hardees incurred on properties they sold and then leased back, using a financing method of accounting.
Sale-leaseback transactions are a way for Hardees to free up capital tied to real estate while still retaining use of the properties. Instead of owning the building outright, Hardees makes lease payments, a portion of which covers the interest expense. For a franchisee, understanding these obligations is important because it reflects Hardees's financial strategy and overall debt structure.
The franchisor's approach to managing its real estate portfolio through sale-leaseback arrangements can impact its financial flexibility and, potentially, the resources available to support franchisees. While sale-leasebacks can provide immediate capital, they also create long-term lease obligations that must be carefully managed. Prospective franchisees should consider how these financial strategies might affect the long-term stability and growth of the Hardees brand.