What was the value of Hardees' financing method sale-leaseback obligations related to deferred income tax assets 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 effect | (322) | 2,986 | |
| Nondeductible share-based compensation | 93 | 446 | |
| General business credits | (379) | (640) | |
| Nondeductible foreign losses | 2,010 | 230 | |
| Uncertain tax positions | (383) | 591 | |
| Foreign derived intangible income deduction | (1,975) | (2,003) | |
| Other, net | (40) | 1,950 | |
| Total income tax expense | $ | 4,266 | $ 16,502 |
Deferred income tax liabilities, net consisted of the following at January 31, 2025 and 2024:
| | 2025
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, the value of their financing method sale-leaseback obligations related to deferred income tax assets was $32,229 in 2024. This figure represents the deferred tax assets specifically tied to Hardees's sale-leaseback financing arrangements.
Sale-leaseback transactions are a method of raising capital where Hardees sells property it owns (typically restaurant locations) to a third party and then leases the property back from the new owner. This allows Hardees to free up capital that was tied up in real estate while still retaining the use of the property for its business operations. The deferred income tax assets related to these transactions arise from temporary differences between the book value and tax basis of the assets and liabilities involved.
For a prospective Hardees franchisee, understanding these figures is crucial for assessing the overall financial health and strategy of the company. While franchisees are not directly involved in these sale-leaseback transactions, the financial stability of the franchisor can impact the support and resources available to franchisees. A strong franchisor balance sheet can mean better marketing, training, and operational support for franchisees.
It's important to note that this figure is just one component of Hardees's overall financial picture. A prospective franchisee should review the entire financial statement, including all assets, liabilities, and equity, to gain a comprehensive understanding of the company's financial position. Consulting with a financial advisor is recommended to fully interpret the implications of these financial statements.