On what date was the Out-of-Court Restructuring agreement executed, resulting in Topco acquiring Burger BossCo for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| (Su | iccessor) | (Pre | decessor) | (Pre | decessor) | ||
|---|---|---|---|---|---|---|---|
| Deferred franchise fees at beginning of period | $ | 10,109 | $ | 10,425 | $ | 10,212 | |
| New deferrals due to cash received and other | 403 | 366 | 1,596 | ||||
| Revenue recognized during the period | (858) | (682) | (1,383) | ||||
| Deferred franchise fees at end of period | $ | 9,654 | $ | 10,109 | $ | 10,425 |
4. Business Combination
Out-of-Court Restructuring
As discussed in Note 1. Description of Business, the Out-of-Court Restructuring agreement, executed on June 16, 2023, resulted in Topco acquiring all of the voting interests of Burger BossCo. As a result, Topco gained control of Burger BossCo and the transaction was determined to be a business combination in accordance with ASC 805 and is accounted for in accordance with the acquisition method of accounting. As the accounting acquirer, Topco will recognize the assets acquired and liabilities assumed at fair value as of the acquisition date. As an indirect subsidiary of the accounting acquirer, the Company has elected to apply pushdown accounting, whereby it will also recognize the assets acquired and liabilities assumed at fair value
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the Out-of-Court Restructuring agreement was executed on June 16, 2023. This agreement resulted in Topco acquiring all of the voting interests of Burger BossCo. Consequently, Topco gained control of Burger BossCo, and the transaction was classified as a business combination under accounting standards. Topco, as the acquirer, recognized the assets and liabilities of Burger BossCo at fair value as of the acquisition date.
As an indirect subsidiary of the accounting acquirer, Checkers elected to apply pushdown accounting, which means it also recognized the assets acquired and liabilities assumed at fair value on June 16, 2023. The total stock consideration for this acquisition was $97.8 million, comprising 90 shares of Burger BossCo acquired by Topco. A third-party valuation specialist determined the fair value of the stock consideration using market and income approaches.
Prior to the Out-of-Court Restructuring on June 16, 2023, the financial statements reflect CDI's position before the restructuring, referred to as "Predecessor." After this date, the financial statements reflect CDI's position after the restructuring, referred to as "Successor." Because the restructuring resulted in a change of control of CDI's parent company, Checkers elected to apply pushdown accounting, recording assets and liabilities at their fair values as of the restructuring date. The document indicates that the Successor and Predecessor financial statements may not be directly comparable due to these changes in accounting basis.