What was the operating lease cost for Checkers from January 3, 2023 through June 16, 2023?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ministrative expenses" and "restaurant retirement costs" within the accompanying consolidated statement of operations.
(Tabular Dollars in Thousands, Except Share and per Share Data)
The following table provides quantitative information concerning the Company's leases under ASC 842, Leases.
| For the Periods | For the Year Ended | |||||
|---|---|---|---|---|---|---|
| June 17, 2023 through January 1, 2024 (Successor) | January 3, 2023 through June 16, 2023 (Predecessor) | January 2, 2023 (Predecessor) | ||||
| Finance lease |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the operating lease cost for the period from January 3, 2023, through June 16, 2023 (Predecessor), was $8.801 million. This figure represents the cost associated with leasing real estate for the operation of Checkers restaurants during that specific timeframe. It's important to note that this cost falls under the accounting standards in effect at the time.
Operating lease costs are a significant expense for many businesses, especially those in the restaurant industry like Checkers, as they involve leasing the physical locations where the restaurants operate. These costs can include rent, property taxes, insurance, and maintenance, depending on the lease agreement. For a prospective franchisee, understanding the operating lease costs is crucial for assessing the overall profitability and financial viability of a Checkers franchise.
It is also important to note that the company wrote off right-of-use operating lease assets in the amount of $2.9 million in the period from January 3, 2023 through June 16, 2023 (Predecessor). These impairment charges recognized in the Predecessor period related to stores that were not profitable, and with investment, were not projected to be profitable. This indicates that Checkers closed some stores during this period that were underperforming.