What was the amortization expense recognized by Checkers on definite-lived intangibles for the fiscal year ended December 30, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
timated future amortization of definite-lived intangible assets is as follows:
| Fiscal Year Ending | Amount | |
|---|---|---|
| 2025 | $ 91 | |
| 2026 | 91 | |
| 2027 | 92 | |
| 2028 | 90 | |
| 2029 | 90 | |
| Thereafter | 769 | |
| Total | $ 1,223 |
Amortization expense recognized on the defin
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the amortization expense recognized on definite-lived intangibles for the fiscal year ended December 30, 2024 (Successor) was $0.1 million. The document also provides amortization expenses for other periods, including $0.1 million for the period from June 17, 2023, through January 1, 2024 (Successor) and $0.5 million for the period from January 3, 2023, through June 16, 2023 (Predecessor). These figures reflect the expense related to the use of intangible assets with a defined lifespan, such as franchise agreements, over the specified periods.
For a prospective Checkers franchisee, understanding amortization expense is crucial as it impacts the company's profitability and financial health. Amortization reflects the cost of using intangible assets like franchise agreements, which are typically amortized over their useful lives. In Checkers's case, franchise agreements are amortized on a straight-line basis over 15 years (Successor) and 27 years (Predecessor), as detailed in Note 11. Goodwill and Intangible Assets, Net.
The FDD also mentions that Checkers assesses definite-lived intangibles for impairment annually or when events indicate that the asset may not be recoverable. Impairment assessments can lead to significant write-downs, as seen with the $21.7 million impairment loss related to franchise agreements during the period ended June 16, 2023 (Predecessor). Such impairments can affect the company's financial performance and, potentially, its ability to support franchisees.
Furthermore, the FDD provides additional context by detailing other amortization and depreciation expenses, such as those related to capitalized software and property and equipment. For instance, capitalized software amortization expense was $0.4 million for the fiscal year ended December 30, 2024 (Successor). These figures, along with the amortization expense for definite-lived intangibles, contribute to the overall operating expenses of Checkers and should be considered when evaluating the franchise's financial statements.