When did Checkers modify its reference rate from LIBOR-based to SOFR-based rates?

According to Checkers' 2025 Franchise Disclosure Document, the company modified its reference rate on June 16, 2023. This modification involved replacing the previous LIBOR-based reference rate with SOFR-based rates. This change likely reflects broader financial industry trends to move away from LIBOR (London Interbank Offered Rate) to alternative reference rates like SOFR (Secured Overnight Financing Rate).

For a prospective Checkers franchisee, this change primarily affects any financing agreements Checkers has, which could indirectly impact franchisees if Checkers' financial health or borrowing costs are affected. It's important to note that Checkers utilized optional expedients set forth in ASC 848 when modifying the contractual terms of these instruments. ASC 848 provides guidance on accounting for contract modifications related to reference rate reform, which suggests Checkers followed established accounting practices during this transition.

While this change may not directly impact the day-to-day operations of a Checkers franchise, understanding the financial implications of reference rate changes is crucial. Franchisees should consider inquiring about how these changes might affect Checkers' overall financial strategy and stability. Additionally, franchisees should stay informed about industry-wide shifts in financial benchmarks and their potential impact on business operations.