What was the original maturity date of the Revolver before it was extended within fiscal 2021 for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
financial institutions party thereto. Holdings also entered into an amendment to the Second Lien Credit Agreement (the "Second Lien Restated Credit Agreement") with Wilmington Trust, National Association (as successor to Jefferies Finance LLC), as administrative agent and collateral agent for the lenders party thereto.
Holdings Restated Credit Agreement converted $19.9 million in aggregate principal amount of Revolver into Restatement Date Term Loans ("RDTL") maturing April 25, 2022 leaving $5.1 million of Revolver. Within fiscal 2021, the maturity date of the RDTL and Revolver was extended to April 25, 2023.
Holdings Restated Credit Agreement amended the terms in that any interest on the loans accrued on or prior to June 14, 2021, shall be payable "in kind", which interest shall be capitalized and added to the outstanding principal balance of the loans
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the original maturity date of the Revolver was April 25, 2022. This Revolver was part of Holdings Restated Credit Agreement, which converted $19.9 million in aggregate principal amount of Revolver into Restatement Date Term Loans (RDTL), leaving $5.1 million of Revolver. Within fiscal year 2021, the maturity date of both the RDTL and Revolver was extended to April 25, 2023.
This detail is relevant for prospective Checkers franchisees because it provides insight into the financial restructuring and debt management of Checkers' parent company, Holdings. Understanding the terms and amendments of credit facilities, such as the Revolver, can help franchisees assess the financial stability and potential risks associated with the franchise. The extension of the maturity date indicates a need for adjusted financial planning and could reflect broader economic conditions or company-specific financial strategies.
Furthermore, the amendment to the First Lien Credit Agreement also allowed for interest on the loans accrued on or prior to June 14, 2021, to be payable "in kind." This meant that the interest was capitalized and added to the outstanding principal balance of the loans. This capitalization of interest was extended beyond June 14, 2021, through the maturity date of the Second Lien within fiscal year 2021. This type of financial maneuvering can impact the overall debt burden and should be considered when evaluating the long-term financial health of the company.
In summary, the original maturity date of April 25, 2022, for the Revolver, and its subsequent extension, along with the capitalization of interest, are important factors for potential Checkers franchisees to consider. These details offer a glimpse into the financial strategies and obligations of the parent company, which can indirectly affect the franchise system's stability and growth prospects.