Following the merger, what happened to Checkers and Rally's Restaurants, Inc. (CRRI)?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
On April 25, 2017, pursuant to the merger agreement (the "Merger Agreement") dated as of March 18, 2017, among Checkers Holdings, Inc. ("Holdings"), Oak Hill Capital Partners IV (Onshore), L.P., a Cayman Islands Exempted Limited Partner ("OHCP") and Burger BossCo, Inc ("Burger BossCo")., a Delaware corporation and a wholly owned subsidiary of OHCP ("Merger Sub") formed solely for the purpose of entering into the merger, Holdings was acquired by Merger Sub (the "Merger"). Following the Merger, Checkers and Rally's Restaurants, Inc. ("CRRI") merged with and into Holdings, with Holdings surviving such merger and becoming CDI's immediate parent. Pursuant to the Assignment and Assumption Agreement dated as of April 25, 2017, OHCP assigned all of its rights and future performance obligations under the Merger Agreement to Burger BossCo, a Delaware corporation that was established solely to consummate the acquisition. Pursuant to Amendment One to the Merger Agreement, Merger Sub merged with and into Holdings with Holdings as the surviving corporation. As a result of such merger, Holdings became a wholly owned subsidiary of Burger BossCo, which was a wholly owned subsidiary of Burger BossCo Holdings, Inc. ("BossCo Holdings" or "Parent"). BossCo Holdings was a holding company controlled by various funds operated by Oak Hill Capital Partners ("Oak Hill").
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, following the merger on April 25, 2017, Checkers and Rally's Restaurants, Inc. (CRRI) merged with and into Holdings, with Holdings surviving the merger. After the merger, Holdings became Checkers Drive-In Restaurants, Inc.'s (CDI) immediate parent. Burger BossCo, a Delaware corporation established to complete the acquisition, was assigned all rights and future performance obligations under the Merger Agreement.
As a result of the merger, Holdings became a wholly-owned subsidiary of Burger BossCo, which itself was a wholly-owned subsidiary of Burger BossCo Holdings, Inc. (BossCo Holdings or Parent). BossCo Holdings was a holding company controlled by various funds operated by Oak Hill Capital Partners (Oak Hill). This complex corporate structure reflects a leveraged buyout transaction, which is a common way for private equity firms to acquire established franchise brands like Checkers.
For a prospective franchisee, this series of transactions primarily impacts the financial reporting and accounting aspects of Checkers. The FDD notes that the Out-of-Court Restructuring resulted in a change in control of CDI's parent, leading the company to apply pushdown accounting. This means assets and liabilities were recorded at their fair values at the date of the restructuring, making the financial statements before and after June 16, 2023, not directly comparable. Franchisees should be aware of these accounting changes when reviewing Checkers's financial performance.
The continued operation of both Checkers and Rally's brands under Checkers Drive-In Restaurants, Inc. (CDI) suggests that franchisees can expect the same level of support, training, and brand recognition as before the merger. However, understanding the financial implications of the merger and restructuring is crucial for assessing the overall financial health and stability of the Checkers franchise system.