What evaluation is Checkers' management required to perform when preparing the consolidated financial statements?

According to Checkers' 2025 Franchise Disclosure Document, when preparing consolidated financial statements, Checkers' management must evaluate whether any conditions or events, when considered together, raise significant doubts about the company's ability to continue operating as a going concern for one year after the consolidated financial statements are issued. This evaluation is a standard accounting practice, ensuring that the financial statements provide a realistic view of the company's financial health.

This evaluation is crucial for prospective franchisees because it provides insight into the financial stability of Checkers. If management identifies substantial doubt about the company's ability to continue as a going concern, it could indicate financial difficulties that might affect the support and services Checkers can provide to its franchisees. This could impact the franchisee's investment and the overall success of their business.

Furthermore, the assessment is based on accounting principles generally accepted in the United States of America. This ensures that Checkers' financial reporting adheres to a consistent and reliable standard, allowing potential franchisees and investors to make informed decisions based on the presented financial information. Franchisees should review these statements and any related auditor's opinions carefully to understand the financial risks and opportunities associated with investing in a Checkers franchise.