What was the net value of reacquired franchise rights for Checkers as of January 1, 2024 (Successor)?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
-------|---------|--|--| | Tradenames | $ 197,500 | $ | 225,900 | | | | Finite-lived intangible assets, net | 1,349 | | 26,335 | | | | Intangible assets, net | $ 198,849 | $ | 252,235 | | |
Finite-lived intangible assets, net consisted of the following as of January 1, 2024 (Successor) and January 2, 2023 (Predecessor):
| January 1, 2024 (Successor) | Januar | y 2, 2 | 023 (Predec | esso | or) | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross mount | mulated rtization | Net | Gross Amount |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, as of January 1, 2024 (Successor), the net value of reacquired franchise rights was zero. This is because the reacquired franchise rights were not ascribed any value as part of the Out-of-Court Restructuring, and therefore amortization ceased as of that date.
In 2022, Checkers recorded $0.4 million for reacquired franchise rights in connection with the purchase of three restaurants from franchisees in Florida. These rights were amortized on a straight-line basis over their useful lives. The amortization expense on reacquired franchise rights was $0.1 million for the fiscal period ended January 1, 2024 (Successor).
For a prospective franchisee, this indicates that any reacquired franchise rights held by Checkers prior to the Out-of-Court Restructuring were effectively written off and hold no current book value. This may reflect a strategic decision by Checkers to restructure its assets and focus on other areas of the business. It's important to note that while these reacquired rights have no assigned value, Checkers may still benefit from the operations of the reacquired restaurants.