To what date was the maturity date of the RDTL and Revolver extended within fiscal 2021 for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
financial institutions party thereto. Holdings also entered into an amendment to the Second Lien Credit Agreement (the "Second Lien Restated Credit Agreement") with Wilmington Trust, National Association (as successor to Jefferies Finance LLC), as administrative agent and collateral agent for the lenders party thereto.
Holdings Restated Credit Agreement converted $19.9 million in aggregate principal amount of Revolver into Restatement Date Term Loans ("RDTL") maturing April 25, 2022 leaving $5.1 million of Revolver. Within fiscal 2021, the maturity date of the RDTL and Revolver was extended to April 25, 2023.
Holdings Restated Credit Agreement amended the terms in that any interest on the loans accrued on or prior to June 14, 2021, shall be payable "in kind", which interest shall be capitalized and added to the outstanding principal balance of the loans
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the maturity date of the RDTL (Restatement Date Term Loans) and Revolver was extended within fiscal year 2021. The extension moved the maturity date to April 25, 2023.
This extension of the maturity date for the RDTL and Revolver indicates a change in the company's debt obligations. For a prospective franchisee, this detail is important because it reflects the financial management and stability of Checkers' parent company, Holdings. Understanding the terms and amendments to credit facilities can provide insight into the financial health of the franchisor.
The fact that interest on the loans accrued on or prior to June 14, 2021, was payable "in kind" and capitalized, further highlights the complexities of Checkers' financial arrangements. This means that instead of paying cash for the interest, the interest was added to the principal balance of the loans, potentially increasing the overall debt. The extension of this treatment beyond June 14, 2021, through the maturity date of the Second Lien suggests a continued strategy of managing cash flow by capitalizing interest expenses.
Prospective franchisees should consider these financial details as part of their due diligence. While the extension provides short-term relief, it also implies a longer-term debt obligation. It is advisable to seek clarification from Checkers regarding the implications of these debt arrangements on the franchise system and the support provided to franchisees.