What was the amount of Checkers' retained earnings (deficit) as of January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
nefit) | | (24,723) | | 540 | | (7,542) | | | | Net income (loss) | $ | 21,260 | $ | (2,570) | $ | (91,106) | | |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(In Thousands)
| Successor | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Additional Retained Paid-in Earnings Capital (Deficit) Common Stock | Total Stockholders' Equity | |||||||||
| Balances at June 17, 2023 | $ | - | $ | - | $ | - | $ | - | ||
| Contribution from business combination | - | 97,819 | - | 97,819 | ||||||
| Stock-based compensation | - | 132 | - | 132 | ||||||
| Co-op retained earnings adjustment | - | - | (86) | (86) | ||||||
| Net loss | - | - | (2,570) | (2,570) | ||||||
| Balances at January 1, 2024 | - | 97,951 | (2,656) | 95,295 | ||||||
| Stock-based compensation | - | 498 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the company's retained earnings (deficit) as of January 1, 2024, was ($2,656). This figure represents the accumulated profits or losses of Checkers that have not been distributed to shareholders as dividends. In this case, the negative value indicates an accumulated deficit.
A retained earnings deficit can arise from various factors, such as consistent losses over time, significant dividend payouts exceeding profits, or accounting adjustments that negatively impact the balance. For a prospective franchisee, a retained earnings deficit might signal financial challenges or past losses within the company.
It's important to note that while a retained earnings deficit provides a snapshot of the company's financial history, it doesn't necessarily indicate current instability. Investors and franchisees should consider this figure in conjunction with other financial metrics, such as revenue trends, profitability margins, and cash flow, to gain a comprehensive understanding of Checkers' overall financial health. Consulting with a financial advisor to analyze these figures is advisable for potential franchisees.