What practical expedient has Checkers elected to use when accounting for lease components?

According to Checkers' 2025 Franchise Disclosure Document, Checkers has elected a practical expedient regarding lease components. Specifically, as both a lessee and a lessor, Checkers has chosen not to separate lease and non-lease components, such as common area maintenance fees, by class of underlying asset. This expedient is applied to all relevant classes.

For a prospective Checkers franchisee, this means that when Checkers accounts for its leases, it combines the lease components (like the base rent) with the non-lease components (like common area maintenance fees) into a single lease component. This simplifies the accounting process for Checkers, as it does not have to allocate costs between these different components.

This election impacts how Checkers reports its financial information and could affect how a franchisee interprets Checkers' financial statements. While this simplifies accounting for Checkers, franchisees should be aware of this practice when reviewing financial documents, as it may present a combined view of lease-related expenses rather than a detailed breakdown.