What significant inputs does Checkers use to estimate the fair value of its long-lived assets?

According to Checkers's 2025 Franchise Disclosure Document, the company estimates the fair value of its long-lived assets using several significant inputs. These include market conditions, which reflect the overall economic environment and its impact on asset values. Checkers also considers comparable properties, likely referring to similar restaurant locations or real estate, to benchmark the value of its own assets. The company's experience with similar sites is another key factor, suggesting an internal understanding of what drives value based on past performance.

To further refine these estimates, Checkers may supplement its analysis with appraisals or independent broker opinions of value. These external assessments provide an unbiased perspective on the asset's worth. The FDD notes that these inputs generally fall within Level 3 of the fair value hierarchy, indicating they are based on unobservable data and subjective judgments. This is typical for unique assets like real estate or restaurant locations where direct market comparisons are difficult to obtain.

For a prospective franchisee, this information highlights the complexity involved in valuing restaurant assets. It also suggests that Checkers takes a comprehensive approach, combining internal knowledge with external expertise. While the use of Level 3 inputs introduces a degree of uncertainty, it also allows for a more tailored valuation that reflects the specific characteristics of each location. Franchisees may want to inquire about the specific methodologies and assumptions used in these valuations to better understand the potential risks and opportunities associated with their investment.