What is the 'Related Party Revolver' for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Lien Term Loan and Second Lien Term Loan are referred to herein as the "Related Party Note" and amounts outstanding under the Revolver are referred to herein as the "Related Party Revolver" and amounts outstanding under the Restatement Date Term Loan are referred to herein as "Related Party Restatement Date Term Loan".
Subsequent to the execution of the Allocation Agreement, principal payments paid by the Company for the related party note were recorded in "principal payments on related party note" in the accompanying consolidated statements of cash flows, and draws and repayments under the related party revolver were recorded in "borrowings under related party revolver" and "payments on related party revolver", respectively. The terms of the Related Party Credit Facility were amended in the same manner as the amendments to Holdings First Lien Restated Credit Agreement and Second Lien Restated Credit Agreement dated August 21. 2019 as well as Holdings Second Amendment to the Amended and Restated First Lien and Second Lien Credit Agreements dated December 31, 2020 as discussed above.
Amendment to Related Party Credit Facility
On August 21, 2019, Holdings entered into an amendment to the First Lien Credit Agreement (the "First Lien Restated Credit Agreement") with Jefferies Finance LLC continuing as administrative agent, joint lead arranger and joint bookrunner, and the 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 on the applicable interest payment dates. The capitalized interest was deemed to be principal on the loan and interest accrued on the capitalized interest until June 14, 2021.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the 'Related Party Revolver' is a credit facility between Holdings and related parties. Principal payments for the related party note were recorded as 'principal payments on related party note' in the consolidated statements of cash flows. Draws and repayments under the related party revolver were recorded as 'borrowings under related party revolver' and 'payments on related party revolver', respectively.
The terms of the Related Party Credit Facility were amended in the same manner as the amendments to Holdings First Lien Restated Credit Agreement and Second Lien Restated Credit Agreement dated August 21, 2019, as well as Holdings Second Amendment to the Amended and Restated First Lien and Second Lien Credit Agreements dated December 31, 2020.
On August 21, 2019, 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. On December 31, 2020, the Second Amendment to First Lien extended the maturity of the Related Party Restatement Date Term Loan and Related Party Revolver from April 25, 2022 to April 25, 2023.