Who acquired all of the voting interests of Burger BossCo as a result of the Out-of-Court Restructuring agreement related to Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| (Su | iccessor) | (Pre | decessor) | (Pre | decessor) | ||
|---|---|---|---|---|---|---|---|
| Deferred franchise fees at beginning of period | $ | 10,109 | $ | 10,425 | $ | 10,212 | |
| New deferrals due to cash received and other | 403 | 366 | 1,596 | ||||
| Revenue recognized during the period | (858) | (682) | (1,383) | ||||
| Deferred franchise fees at end of period | $ | 9,654 | $ | 10,109 | $ | 10,425 |
4. Business Combination
Out-of-Court Restructuring
As discussed in Note 1. Description of Business, the Out-of-Court Restructuring agreement, executed on June 16, 2023, resulted in Topco acquiring all of the voting interests of Burger BossCo. As a result, Topco gained control of Burger BossCo and the transaction was determined to be a business combination in accordance with ASC 805 and is accounted for in accordance with the acquisition method of accounting. As the accounting acquirer, Topco will recognize the assets acquired and liabilities assumed at fair value as of the acquisition date. As an indirect subsidiary of the accounting acquirer, the Company has elected to apply pushdown accounting, whereby it will also recognize the assets acquired and liabilities assumed at fair value
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Topco acquired all of the voting interests of Burger BossCo as a result of the Out-of-Court Restructuring agreement, which was executed on June 16, 2023. As a result of this acquisition, Topco gained control of Burger BossCo, and the transaction was classified as a business combination. This means that Topco, as the acquiring entity, recognized the assets and liabilities of Burger BossCo at their fair value as of the acquisition date.
For a prospective Checkers franchisee, this information is relevant because it provides insight into the ownership and financial restructuring of Checkers' parent company. The Out-of-Court Restructuring and the acquisition by Topco indicate a significant change in the company's financial structure and control. Understanding these changes can help a franchisee assess the stability and future direction of the Checkers franchise system.
The FDD further explains that the total stock consideration for this acquisition was $97.8 million, comprising 90 shares of Burger BossCo acquired by Topco. The fair value of the stock consideration was determined through a third-party valuation using market and income approaches. This level of detail in the FDD offers transparency regarding the financial aspects of the restructuring and acquisition, which can be valuable for potential franchisees in making informed decisions.
Overall, the acquisition of Burger BossCo by Topco represents a major event in Checkers' recent history, with potential implications for its franchisees. The financial details and accounting methods used in this transaction are disclosed in the FDD, providing franchisees with important information to consider as they evaluate the franchise opportunity.