For Checkers, what is the amortization period for prepaid expenses such as rent, insurance, maintenance, equipment, software, and service agreements?

According to Checkers' 2025 Franchise Disclosure Document, the company amortizes prepaid expenses such as rent, insurance, maintenance, equipment, software, and service agreements over the period in which the services are provided, but not exceeding one year. This means that Checkers capitalizes these expenses when paid and recognizes them as an expense over the duration of the service or benefit, as long as that period is a year or less.

For a prospective Checkers franchisee, this indicates that prepaid expenses will be accounted for in the short term. For example, if a franchisee prepays for an annual insurance policy, the expense will be recognized evenly over the year rather than all at once. This can impact the franchisee's financial statements, particularly in the first year of operation, by spreading out the expense recognition.

This accounting practice is fairly standard. By amortizing these prepaid expenses over a short period, Checkers aims to match the expense with the benefit received, providing a more accurate picture of the company's financial performance during that period. Franchisees should be aware of this amortization schedule when budgeting and forecasting their expenses.