What is the interest rate for the New Money Loans for Checkers, and when do they mature?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
New Money Loans, maturing June 16, 2027, bearing interest at an alternative base rate plus 6% or the Adjusted Term SOFR plus 7% plus a credit adjustment spread. Company has option to pay interest in kind at a rate equal to 4% rather than in cash.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the New Money Loans accrue interest at a floating rate. Checkers has the option to set the rate at either an alternative base rate plus 6% per annum, or the Adjusted Term Secured Overnight Financing Rate plus 7% per annum, in addition to a credit adjustment spread. Checkers also has the option to pay interest that has accrued at a rate equal to 4% per annum in kind, rather than in cash. The New Money Loans mature on June 16, 2027.
As of December 30, 2024, the New Money Loans outstanding were valued at $10,436,000, while on January 1, 2024, they were valued at $10,081,000. The FDD also states that the company funded $10 million out of the total $25 million commitment as part of issuing the New Money Loans.
Prospective franchisees should note that these loans are part of Checkers's overall debt structure and are not directly related to franchisee financing. However, understanding the company's financial obligations can provide insight into its financial health and stability. Franchisees may want to inquire about how these obligations could affect the support and resources available to them.