What was the amount of Checkers' business interest limitation carryforward as of January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
mporary differences that give rise to significant portions of the deferred income tax assets and liabilities recognized within "deferred income tax liabilities" in the accompanying consolidated balance sheets as of December 30, 2024 (Successor) and January 1, 2024 (Successor) were as follows:
| For the Year Ended December 30, 2024 (Successor) | For the Period Ended January 1, 2024 (Successor) | |
|---|---|---|
| Deferred tax assets | ||
| Net operating loss carryforwards | $ 58 | $ - |
| Business interest limitation carryforward | 24,472 | 21,518 |
| Accruals | 2,184 | 2,211 |
| Operating ROU assets | 36,262 | 39,355 |
| Difference between book and tax basis of property and equipment | 3,183 | 9,423 |
| Allowance for credit losses | 163 | 69 |
| Stock-based compensation | - | 32 |
| Deferred revenue and other | 2,291 | 2,507 |
| Deferred tax assets | 68,613 | 75,115 |
| Less: valuation allowance | (10,188) | (38,288) |
| Net deferred tax assets | 58,425 | 36,827 |
| Deferred tax liabilities | ||
| Difference between book and tax basis of brands intangible assets | (49,122) | ( |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the company had a business interest limitation carryforward of $21,518 as of January 1, 2024. This figure represents the amount of business interest expense that Checkers was unable to deduct in prior years due to limitations imposed by tax laws, and which can be carried forward to future years to offset taxable income.
For a prospective Checkers franchisee, understanding the business interest limitation carryforward is important because it reflects the company's past financial performance and tax strategies. While this carryforward does not directly impact the franchisee's individual business operations, it provides insight into the overall financial health and tax planning of the parent company. A substantial carryforward might suggest that Checkers has faced challenges in fully deducting its interest expenses in the past, potentially due to profitability or debt levels.
It is important to note that changes in tax laws or the company's financial situation could affect the usability of this carryforward in the future. Franchisees should consider this information as part of their broader due diligence, assessing the stability and financial management of Checkers as a franchise system. Consulting with a financial advisor is recommended to fully understand the implications of Checkers' financial statements and tax positions.