What was the amount of Checkers' operating right-of-use assets as of January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ain internal control-related matters that we identified during the audit.
Tampa, Florida April 1, 2025
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| December 30, January 1, 2024 2024 ASSETS Current assets Cash and cash equivalents $ 15,562 $ 12,557 Accounts and notes receivable, net 7,717 7,399 Inventory 2,428 2,178 Prepaid expenses 5,338 5,308 Other current assets 799 2,867 Total current assets 31,844 30,309 Property and equipment, net 31,679 29,309 Operating lease right-of-use assets 132,807 145,380 Finance lease right-of-use assets 31,231 22,632 Intangibles assets, net 198,723 198,849 Favorable leasehold interests 1,421 1,848 Goodwill, net 26,872 30,037 Other assets 1,203 2,353 Total assets $ 455,780 $ 460,717 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 3,563 $ 2,650 Accrued liabilities 13,855 13,801 Accrued wages and benefits 3,708 4,148 Current portion of deferred revenue 2,652 2,717 Current maturities of long-term debt 1,788 1,802 Current maturities of financing obligations 67 77 Current portion of accrued self-insurance 2,365 1,640 Current portion of operating lease liabilities 11,490 11,742 Current portion of finance lease liabilities 966 545 Total current liabilities 40,454 39,122 Deferred income tax liabilities 22,368 48,330 Operating lease liabilities, less current portion 134,307 149,180 Finance lease liabilities, less current portion 33,979 24,738 Long-term debt, less current maturities 90,271 85,812 Financing obligations, less current maturities 7,783 7,846 Deferred revenue, less current portion 6,373 6,937 Accrued self-insurance, less current portion 2,020 2,211 Unfavorable leasehold interests 113 169 Other long-term liabilities 878 1,077 Total liabilities 338,546 365,422 Commitments and contingencies (Note 15) Stockholders' equity Common stock, $0.01 par value, 100 shares authorized, issued, and outstanding as of December 30,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the company's operating lease right-of-use assets as of January 1, 2024, totaled $145,380,000. This figure represents the value of Checkers' rights to use leased properties, such as restaurant locations, under operating lease agreements. These assets are recognized on the balance sheet and reflect the economic benefits Checkers expects to receive from using these properties over the lease terms.
Operating lease right-of-use assets are a significant component of Checkers' overall asset base, reflecting the capital tied up in leased locations. For a prospective franchisee, this indicates that Checkers relies heavily on leasing rather than owning its restaurant properties. This can have implications for the franchisee as well, as they will likely need to secure leases for their own locations, impacting their initial investment and ongoing operating expenses.
The value of operating lease right-of-use assets can fluctuate based on factors such as new lease agreements, lease terminations, and reassessments of lease terms. The FDD also mentions that Checkers wrote off $0.4 million in right-of-use operating lease assets due to store closures during the period ended January 1, 2024, which can impact the overall value of these assets.
Prospective franchisees should carefully consider the lease terms and conditions associated with their potential restaurant locations, as these leases will represent a significant financial obligation. Understanding how Checkers manages its lease portfolio can provide valuable insights into the company's financial strategy and risk management practices.