What were Checkers' prepaid expenses as of January 2, 2023?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
h as rent, insurance, maintenance, equipment, software and service agreements for future periods. These amounts are capitalized when paid and amortized over the period in which the services are provided, not
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Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, as of January 2, 2023, the most significant component of prepaid expenses was prepaid insurance, which had a balance of $2.4 million.
Prepaid expenses are costs that Checkers has paid in advance for goods or services that will be used in the future. Prepaid insurance represents insurance premiums paid for coverage extending beyond the balance sheet date. These prepaid expenses are considered assets on the balance sheet because they represent future economic benefits for Checkers.
For a prospective Checkers franchisee, understanding the level and composition of prepaid expenses can provide insights into the company's financial management and future obligations. Prepaid expenses like insurance are a normal part of business operations, but significant changes from year to year could signal shifts in strategy or risk management. Reviewing these figures in the context of the full financial statements can help a franchisee assess the financial health and stability of Checkers.