What was the advertising expense for Checkers during the period from June 17, 2023 through January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
| Successor | Predecessor | |||||||
|---|---|---|---|---|---|---|---|---|
| Year Ended December 30, 2024 | Period from June 17, 2023 through January 1, 2024 | Period from January 3, 2023 through June 16, 2023 | ||||||
| Revenues | ||||||||
| Restaurant sales | $ | 255,474 | $ | 141,217 | $ | 130,191 | ||
| Franchise and retail royalty revenue | 35,389 | 18,608 | 15,385 | |||||
| Franchise fees and other income | 9,518 | 5,317 | 4,061 | |||||
| Total revenues | 300,381 | 165,142 | 149,637 | |||||
| Costs and expenses | ||||||||
| Restaurant food and paper costs | 81,660 | 45,102 | 41,194 | |||||
| Restaurant labor costs | 79,230 | 44,446 | 38,348 | |||||
| Restaurant occupancy costs | 22,378 | 11,778 | 11,145 | |||||
| Restaurant depreciation | 5,871 | 2,524 | 7,529 | |||||
| Other restaurant operating expenses | 34,053 | 20,357 | 17,423 | |||||
| General and administrative expenses | 39,215 | 19,435 | 36,471 | |||||
| Franchise support and service expenses | 5,226 | 3,634 | 1,696 | |||||
| Advertising expense | 14,397 | 8,077 | 6,810 | |||||
| Other depreciation and amortization | 3,441 | 2,093 | 900 | |||||
| Restaurant retirement costs | 139 | 300 | 596 | |||||
| Impairment of long-lived assets | 2,384 | 623 | 66,633 | |||||
| Net loss on disposal of fixed assets | 64 | 670 | 839 | |||||
| Total costs and expenses | 288,058 | 159,039 | 229,584 | |||||
| Operating income (loss) | 12,323 | 6,103 | (79,947) | |||||
| Other income (expense) | ||||||||
| Interest expense | (15,789) | (8,134) | (18,326) | |||||
| Other income (expense) | 3 | 1 | (375) | |||||
| Total other (expense) income | (15,786) | (8,133) | (18,701) | |||||
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the advertising expense for the period from June 17, 2023, through January 1, 2024, was $8,077. This figure represents the expenses Checkers incurred for advertising during that specific timeframe, which is also referred to as the Successor period. This information is derived from the consolidated statements of operations within the financial statements.
It's important to note that Checkers and its franchisees contribute to the Checkers/Rally's National Production Fund (NPF) for advertising purposes. These contributions are included in the advertising expense reported in the consolidated statements of operations. Additionally, some company-operated restaurants and franchisees participate in advertising co-ops, which may also influence the overall advertising expenditure. The contributions to the Fund represent 0.5% of net restaurant sales, while contributions to the advertising co-ops range from 0.5% to 4.25% of net restaurant sales.
Prospective franchisees should understand that advertising expenses are a necessary cost for promoting the Checkers brand and attracting customers. The $8,077 expense for the specified period provides insight into the level of investment Checkers makes in advertising. However, it is essential to consider that this figure may vary in other periods due to factors such as changes in advertising strategies, market conditions, and the level of participation in advertising co-ops. Franchisees may want to inquire about the advertising plans and strategies that Checkers has in place to support their business.