What is the total undiscounted amount of operating lease payments for Checkers?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
the current lease liability by applying the liability's effective interest rate to the total contractual payments that are due within the next 12 months. A maturity analysis of annual undiscounted cash flows for lease liabilities under noncancelable leases as of January 1, 2024 (Successor), is as follows (in thousands):
| Fiscal Year | 9) | Operating leases | Finance leases | ||
|---|---|---|---|---|---|
| 2024 | $ | 17,522 | $ | 1,536 | |
| 2025 | 17,385 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, the total undiscounted operating lease payments are detailed in the financial statements. For the fiscal year 2024, the total undiscounted operating lease payments amount to $232,626,000. This figure represents the sum of lease payments due for the years 2024 through thereafter, without accounting for interest or present value.
Specifically, the operating lease payments are broken down by year, starting with $17,522,000 in 2024, $17,385,000 in 2025, $15,484,000 in 2026, $12,937,000 in 2027, $12,362,000 in 2028, and $156,936,000 thereafter. These payments cover the use of properties and facilities necessary for Checkers' operations. The document also notes that a portion of these lease payments may include contingent rental provisions based on a percentage of gross sales if certain thresholds are met, although these contingent rent expenses were not material for the reported periods.
For a prospective Checkers franchisee, understanding these lease obligations is crucial. These figures represent a significant financial commitment that must be factored into the overall business plan. Franchisees should carefully review the terms of their lease agreements, including any contingent rent provisions, to fully understand their financial responsibilities. Additionally, it's important to note that these are undiscounted figures, meaning the actual cost over the life of the lease, when accounting for the time value of money, will be lower, as reflected in the 'Present value of lease payments' figure of $160,922,000 after deducting interest of $71,704,000.