Under Checkers' self-insurance program, what balance sheet captions are used to present the liabilities for self-insurance?

According to Checkers' 2025 Franchise Disclosure Document, the liabilities for self-insurance are presented on the consolidated balance sheets under two captions. The first is "current portion of accrued self-insurance," which was $1.6 million as of January 1, 2024, and $1.7 million as of January 2, 2023. The second caption is "accrued self-insurance, less current portion," which was $2.2 million as of January 1, 2024, and $2 million as of January 2, 2023. These figures are undiscounted.

In simpler terms, Checkers divides its self-insurance liabilities into two categories: the portion expected to be paid out within the next year (current portion) and the portion expected to be paid out over a longer period (accrued self-insurance, less current portion). This is a standard accounting practice to distinguish between short-term and long-term liabilities.

For a prospective Checkers franchisee, this means that Checkers retains some risk for workers' compensation, general liability, and healthcare claims, rather than transferring all risk to an insurance company. Checkers uses a third-party specialist to estimate these potential losses. The company also maintains letters of credit to secure general liability and self-insured workers' compensation claims, with a $2.1 million letter of credit as of both January 1, 2024, and January 2, 2023.

It's important to note that if Checkers experiences a higher number of claims or higher costs per claim than anticipated, the liabilities for self-insurance may not be sufficient, and additional expenses may be recorded. Conversely, if the actual claims experience is more favorable than estimated, a resulting expense reduction may be recorded, impacting the company's financial performance.