What was the operating lease expense for Checkers for the year ended December 30, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
s and restaurant retirement costs line items within the accompanying consolidated statement of operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The following table provides quantitative information concerning the Company's leases under ASC 842, Leases.
| For the Period For the Year Ended December 30, 2024 | from June 17, | 2023 through January 1, 2024 | For the Period | January 3, 2023 through June 16, 2023 | from | |
|---|---|---|---|---|---|---|
| Finance lease expense: | $ 2,699 | $ | 1,201 | $ | 674 | |
| Amortization of ROU assets | 1,396 | 455 | 237 | |||
| Interest expense on lease liabilities | 1,303 | 746 | 437 | |||
| Operating lease expense | 14,873 | 9,117 | 8,801 | |||
| Variable lease expense | 3,524 | 1,171 | 920 | |||
| Sublease income | (2,006) | (1,858) | (1,029) | |||
| Total net lease cost | $ 21,879 | $ | 9,631 | $ | 9,366 | |
| Other lease information | ||||||
| Cash paid for amounts included in the | ||||||
| measurement of lease liabilities | ||||||
| Operating cash flows from finance leases | $ 1,303 | $ | 746 | $ | 437 | |
| Operating cash flows from operating | ||||||
| leases | 17,434 | 8,154 | 8,250 | |||
| Financing cash flows from finance leases | 582 | 254 | 159 | |||
| Right-of-use assets obtained in exchange for new | ||||||
| finance lease liabilities | $ 7,481 | $ | 8,283 | $ | 7,808 | |
| Right-of-use assets obtained in exchange for new | ||||||
| operating lease liabilities | $ 664 | $ | 1,006 (Successor) December 30, 2024 | $ | 1,058 January 1, 2024 | |
| Weighted-average remaining lease term - finance leases | 20.9 years | 22.6 years | ||||
| Weighted-average remaining lease term - operating leases |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the operating lease expense for the year ended December 30, 2024 (Successor) was $14,873. This figure represents the cost associated with leasing properties and equipment necessary for Checkers' operations. It's important to note that this expense is distinct from finance lease expenses, variable lease expenses, and sublease income, all of which contribute to the total net lease cost.
For a prospective Checkers franchisee, understanding the operating lease expense is crucial as it directly impacts the profitability of the franchise. This expense, along with other lease-related costs, contributes to the overall financial obligations of running a Checkers restaurant. Franchisees should carefully review the terms of their lease agreements and consider these expenses when projecting their potential earnings.
Additionally, the FDD provides a breakdown of other lease-related information, such as cash paid for amounts included in the measurement of lease liabilities, operating cash flows from operating leases, and right-of-use assets obtained in exchange for new operating lease liabilities. These figures offer further insight into Checkers' leasing practices and can help franchisees assess the financial implications of leasing arrangements.