What is the company's belief regarding the annual limitation's impact on the utilization of the IRC 163 interest expense attribute for Checkers?

According to Checkers' 2025 Franchise Disclosure Document, the company believes that the annual limitation will restrict the utilization of the company's IRC 163 interest expense attribute. This belief is connected to the Out-of-Court Restructuring, which subjects Burger BossCo to Internal Revenue Code Section 382 due to a change in ownership.

For a prospective franchisee, this means that Checkers anticipates limitations on its ability to deduct interest expenses for tax purposes. The IRC 163 interest expense attribute refers to the deduction allowed for interest paid or accrued on debt. The restriction on utilizing this attribute could potentially increase Checkers' overall tax liability, which might affect its financial performance and, indirectly, the support and services it can provide to franchisees.

It is important for potential franchisees to understand the implications of these tax limitations, as they could influence the financial health of the franchisor. While the FDD doesn't specify the exact financial impact, it's advisable for prospective franchisees to discuss this matter further with Checkers to assess any potential risks or benefits associated with this tax situation.