What was the amortization of right-of-use assets for Checkers from January 3, 2023 through June 16, 2023?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Net income | | - | | - | | 21,260 | | 21,260 | | | | Balances at December 30, 2024 | $ | - | $ | 98,449 | $ | 18,785 | $ | 117,234 | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(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 | |||
| Operating activities: | |||||||
| Net income (loss) | $ | 21,260 | $ | (2,570) | (91,106) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 9,312 | 4,638 | 8,552 | 892 | |||
| Amortization of deferred financing costs | 294 | 54 | |||||
| Provision for credit losses | 582 | 122 | 94 | ||||
| Deferred income tax expense (benefit) | (25,962) | 4 | (7,529) | ||||
| Noncash operating lease expense, net | 14,873 | 5,490 | 6,878 | ||||
| Right-of-use asset amortization for finance lease | 2,699 | 455 | 262 | ||||
| Change in favorable leasehold interests | 427 | 232 | 146 | ||||
| Change in unfavorable leasehold interests | 56 | (31) | 5,720 | (29) | |||
| Noncash stock based compensation | 498 | 132 | |||||
| Noncash interest on long-term debt | 5,201 | 2,534 | 13,808 | ||||
| Impairment of long-lived assets | 2,384 | 623 | 66,633 | ||||
| Net loss on disposal of fixed assets | 64 | 670 | 839 | ||||
| Changes in operating assets and liabilities: | |||||||
| Decrease (increase) in accounts receivable, net | (264) | (1,693) | 221 | ||||
| Decrease (increase) in inventory | (250) | 927 | 1,137 | (564) | |||
| Decrease (increase) in prepaid expenses | (30) | (1,618) | |||||
| Decrease (increase) in other current assets | 1,881 | (1,241) | 105 | ||||
| Decrease in other noncurrent assets | 1,150 | 231 | 602 | ||||
| (Decrease) increase in accounts payable | 582 | (16) | (247) | ||||
| (Decrease) increase in accrued liabilities, accrued wages and benefits, deferred | |||||||
| revenue, self-insurance, and long-term liabilities | (680) | (7,774) | 9,416 | ||||
| Change in operating lease liabilities | (17,434) | (8,154) | (8,250) | (584) | |||
| Other changes, net | (793) | (237) | |||||
| Net cash provided by (used in) operating activities | 15,850 | (7,222) | 6,996 | ||||
| Investing activities: | |||||||
| Capital expenditures | (10,024) | (7,269) | (5,513) | ||||
| Net cash used in investing activities | (10,024) | (7,269) | (5,513) | ||||
| Financing activities: | |||||||
| Payment for debt issuance costs | - | (500) | - | ||||
| Principal payments on long-term debt | (812) | (1,304) | (1,360) | ||||
| Principal payments on financing obligations | (73) | (47) | (400) | ||||
| Repayments on finance lease liabilities | (1,885) | (254) | (159) | ||||
| Proceeds from short-term financing | 1,464 | 1,540 | - | ||||
| Payment on short-term financing | (1,515) | - | - | ||||
| Proceeds from the issuance of long-term financing | - | 10,000 | - | ||||
| Net cash (used in) provided by financing activities | (2,821) | 9,435 | (1,919) | ||||
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS | 3,005 | (5,056) | (436) | ||||
| Cash, cash equivalents, and restricted cash at beginning of period | 12,557 | 17,613 | 18,049 | ||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 15,562 | $ | 12,557 | $ 17,613 | ||
| Supplemental disclosure of cash flow information: | |||||||
| Cash paid for interest | $ | 7,859 | $ | 4,619 | $ | 458 | |
| Income taxes paid, net of refunds | 558 | 18 | 43 | ||||
| Non-cash activities: | |||||||
| Non-cash right-of-use assets obtained in exchange for operating leases | $ | 664 | $ | 1,006 | $ 1,058 | ||
| Non-cash right-of-use assets obtained in exchange for finan |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the right-of-use asset amortization for finance leases during the period from January 3, 2023, through June 16, 2023, was $262.
This figure represents the expense recognized for the depreciation of assets that Checkers has the right to use under finance lease agreements during that specific time frame. Finance leases are essentially leases where the franchisee assumes most of the risks and rewards of ownership.
For a prospective Checkers franchisee, understanding this amortization expense is crucial for assessing the overall financial performance and profitability of the business. It is important to consider how these expenses will impact the franchisee's net income and cash flow, especially when evaluating the terms of any finance leases they may enter into.