What was the reported fair value of Checkers' cash and cash equivalents after the Out-of-Court Restructuring?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
, if any, to recognize. In making this determination, the Company considered several factors provided by U.S. GAAP, including the Company's performance. By evaluating these factors, the Company determined that these assets are not more likely than not impaired in the Successor period.
Fair Value of Financial Instruments
The carrying amounts for cash and cash equivalents, receivables, other current assets, accounts payable and other current liabilities approximate their fair value due to the short-term nature of these accounts. Accordingly, such financial instruments are considered Level 1 measures within the valuation hierarchy. As of January 1, 2024 (Successor), the carrying value of the Company's long-term debt, current and noncurrent portions, excluding finance leases and financing obligations and net of deferred financing costs was $87.6 million, and approximated
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the carrying amounts for cash and cash equivalents approximate their fair value due to their short-term nature. These financial instruments are considered Level 1 measures within the valuation hierarchy. As of January 1, 2024 (Successor), the carrying value of Checkers' cash and cash equivalents approximates fair value.
This means that the value recorded on Checkers's balance sheet for these assets closely reflects what they could be sold for in the market. This is a common accounting practice for liquid assets like cash because their market value is readily available and doesn't fluctuate significantly over short periods.
For a prospective franchisee, this indicates that Checkers maintains a transparent and straightforward approach to valuing its most liquid assets. While the document specifies that the carrying amounts approximate fair value, it does not provide a specific dollar amount for cash and cash equivalents after the Out-of-Court Restructuring. Therefore, a prospective franchisee should inquire directly with Checkers about the specific fair value of cash and cash equivalents to gain a clearer understanding of the company's financial position.