What was the amount of Accounts receivable from NPF and CDSI for Checkers as of January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
member, representing 25% of the CDSI Board of Directors is an employee of the Company. CDSI is not included in the accompanying consolidated financial statements, although the company's contributions to CDSI are included within "restaurant food and paper costs" in the accompanying consolidated statements of operations.
The Company pays invoices on behalf of NPF and CDSI and then bills each for the balance of these invoices each period. This resulted in $2.6 million and $0.7 million of accounts receivable for the NPF and CDSI, respectively, as of January 1, 2024 (Successor). As of January 2, 2023 (Predecessor), the accounts receivable recorded for the NPF and CDSI were $1.2 million and $1.0 million, respectively. Accounts receivable for the NPF and CDSI are included in the "accounts and notes receivable, net" in the accompanying consolidated balance sheet.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, as of January 1, 2024, the accounts receivable from the Checkers/Rally's National Production Fund, Inc. (NPF) was approximately $2.6 million, and the accounts receivable from Checkers and Rally's Distribution and Services, Inc. (CDSI) was approximately $0.7 million. These figures represent the amounts Checkers bills to NPF and CDSI for invoices the company pays on their behalf. The total accounts receivable from NPF and CDSI was $3,325.
For a prospective Checkers franchisee, this indicates the financial relationship between Checkers and its related entities, NPF and CDSI. These related-party transactions are a normal part of Checkers' operations, with NPF handling advertising and CDSI managing procurement services. Franchisees should be aware that a portion of their sales goes towards these entities, as detailed in Item 21 of the FDD.
It's important to note that NPF and CDSI are not included in Checkers' consolidated financial statements, but the company's contributions to these funds are included in advertising expenses and restaurant food and paper costs. This distinction is relevant for understanding the overall financial structure and how funds are allocated within the Checkers system. Franchisees should review the complete financial statements and related notes in Exhibit H of the FDD to fully understand these relationships and their potential impact on their investment.