What was the reported value of Checkers' tradenames, indefinite-lived, as of January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fiscal Year Ending | Amount |
|---|---|
| 2025 | $ 3,166 |
| 2026 | 3,166 |
| 2027 | 3,166 |
| 2028 | 3,166 |
| 2029 | 3,166 |
| Thereafter | 11,042 |
| Total | $ 26,872 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Intangible assets consisted of the following as of December 30, 2024 (Successor) and January 1, 2024 (Successo
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the reported value of its tradenames, considered indefinite-lived, was $197,500 as of January 1, 2024. This figure represents the estimated value of the Checkers and Rally's brand names and associated trademarks. These tradenames are classified as indefinite-lived assets, meaning Checkers expects them to retain their value for the foreseeable future, and thus they are not amortized like other assets with a finite lifespan. Instead, they are periodically tested for impairment, and their value is adjusted if necessary.
For a prospective Checkers franchisee, this valuation is an indicator of the established brand recognition and reputation that comes with the franchise. A strong, well-recognized brand can make it easier to attract customers and build a successful business. The tradename value reflects the cumulative investment Checkers has made in marketing, advertising, and maintaining the quality and consistency of its products and services over the years.
It's important to note that the valuation of intangible assets like tradenames involves significant judgment and estimates. Checkers uses the relief from royalty method to determine the fair value of its tradenames. This method estimates the value of the tradename by calculating the hypothetical royalty payments that Checkers would have to pay if it did not own the tradename and had to license it from a third party. The valuation incorporates significant unobservable inputs and requires significant judgment and estimates, including the amount and timing of future cash flows.
While the tradename value provides a snapshot of the brand's worth at a specific point in time, it's essential for potential franchisees to conduct their own due diligence and assess the brand's strength and relevance in their local market. Factors such as local competition, demographic trends, and consumer preferences can all influence the actual value of the Checkers brand in a particular area.