What was the effective interest rate for Checkers' Last-Out Term Loans as of December 30, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
January 3, 2023, through June 16, 2023 (Predecessor), respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NOTE 10 - DEBT
Debt consisted of the following as of December 30, 2024 (Successor) and January 1, 2024 (Successor):
| Successor | ||||
|---|---|---|---|---|
| December 30, 2024 | January 1, 2024 | |||
| Obligations under premium financing arrangements, with short | $ | 976 | $ | 1,028 |
| term maturities. | ||||
| Last-Out Term Loans, maturing June 16, 2028, bearing interest at | 80,988 | 76,952 | ||
| an alternative base rate plus 8% or the Adjusted Term SOFR | ||||
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the effective interest rate for the Last-Out Term Loans as of December 30, 2024, was 15.16%. These loans mature on June 16, 2028, and the interest is based on an alternative base rate plus 8% or the Adjusted Term SOFR plus 9% plus a credit adjustment spread.
Checkers also has the option to pay interest in kind at a rate equal to 6% rather than in cash. The principal loan amount outstanding for the Last-Out Term Loans as of December 30, 2024, was $80,988.
Prospective franchisees should consider the impact of these interest rates on the overall cost of financing and the potential effect on profitability. Understanding the terms of the Last-Out Term Loans, including the maturity date and the options for paying interest, is crucial for financial planning.