What assets secured the Revolver borrowings for Checkers, and which entities guaranteed it?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Borrowings under the Revolver incurred interest, at the Company's option, at either (i) the LIBOR rate plus 4.25% or (ii) the alternative base rate plus 3.25% (in each case, as defined in the First Lien Restated Credit Agreement). The Revolver was required to be guaranteed by domestic subsidiaries of the Company and was secured by substantially all of the Company's and any subsidiary guarantor's assets. The Revolver contained customary representations and warranties, subject to limitations and exceptions, and customary covenants and events of default.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Revolver borrowings were secured by substantially all of Checkers' assets, as well as the assets of any subsidiary guarantors. The Revolver was required to be guaranteed by Checkers' domestic subsidiaries.
This means that if Checkers or its domestic subsidiaries were to default on the Revolver loan, the lenders would have a claim on essentially all of the company's assets. This could include cash, accounts receivable, inventory, equipment, and intellectual property. For a potential franchisee, this indicates the level of financial commitment and security the company provides to its lenders.
The presence of such a comprehensive security agreement suggests that Checkers has a significant financial infrastructure and that lenders have confidence in the company's ability to repay its debts. However, it also implies that Checkers' financial health is closely tied to its ability to manage its debt obligations and maintain the value of its assets.