What were the restaurant labor costs for Checkers for the period January 1, 2023 through January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
| Successor | Predecessor | |||||||
|---|---|---|---|---|---|---|---|---|
| Year Ended December 30, 2024 | Period from June 17, 2023 through January 1, 2024 | Period from January 3, 2023 through June 16, 2023 | ||||||
| Revenues | ||||||||
| Restaurant sales | $ | 255,474 | $ | 141,217 | $ | 130,191 | ||
| Franchise and retail royalty revenue | 35,389 | 18,608 | 15,385 | |||||
| Franchise fees and other income | 9,518 | 5,317 | 4,061 | |||||
| Total revenues | 300,381 | 165,142 | 149,637 | |||||
| Costs and expenses | ||||||||
| Restaurant food and paper costs | 81,660 | 45,102 | 41,194 | |||||
| Restaurant labor costs | 79,230 | 44,446 | 38,348 | |||||
| Restaurant occupancy costs | 22,378 | 11,778 | 11,145 | |||||
| Restaurant depreciation | 5,871 | 2,524 | 7,529 | |||||
| Other restaurant operating expenses | 34,053 | 20,357 | 17,423 | |||||
| General and administrative expenses | 39,215 | 19,435 | 36,471 | |||||
| Franchise support and service expenses | 5,226 | 3,634 | 1,696 | |||||
| Advertising expense | 14,397 | 8,077 | 6,810 | |||||
| Other depreciation and amortization | 3,441 | 2,093 | 900 | |||||
| Restaurant retirement costs | 139 | 300 | 596 | |||||
| Impairment of long-lived assets | 2,384 | 623 | 66,633 | |||||
| Net loss on disposal of fixed assets | 64 | 670 | 839 | |||||
| Total costs and expenses | 288,058 | 159,039 | 229,584 | |||||
| Operating income (loss) | 12,323 | 6,103 | (79,947) | |||||
| Other income (expense) | ||||||||
| Interest expense | (15,789) | (8,134) | (18,326) | |||||
| Other income (expense) | 3 | 1 | (375) | |||||
| Total other (expense) income | (15,786) | (8,133) | (18,701) | |||||
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, restaurant labor costs are detailed in the financial statements. However, due to a Recapitalization Agreement, the company presents financial information for two separate periods that, when combined, cover the requested timeframe. The first period, referred to as the 'Predecessor Period,' runs from January 3, 2023, through June 16, 2023, during which restaurant labor costs totaled $38,348. The second period, known as the 'Successor Period,' spans from June 17, 2023, through January 1, 2024, with restaurant labor costs amounting to $44,446.
To determine the total restaurant labor costs for Checkers from January 1, 2023, to January 1, 2024, a prospective franchisee would need to combine the labor costs from both the Predecessor and Successor periods. This calculation yields a total of $82,794 ($38,348 + $44,446). This figure represents the aggregate labor expenses for company-operated restaurants during the specified timeframe.
It is important to note that these costs reflect only those of company-operated restaurants and may not be representative of franchised locations. Labor costs can vary significantly based on factors such as location, staffing models, local minimum wage laws, and employee benefits packages. Therefore, franchisees should conduct their own due diligence to estimate labor costs for their specific restaurant.
Prospective franchisees should carefully review the complete financial statements and consult with Checkers to understand the factors influencing labor costs and to develop realistic financial projections for their franchise operations. Understanding these costs is crucial for assessing the potential profitability and sustainability of a Checkers franchise.