What was the variable lease expense for Checkers from June 17, 2023 through January 1, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
s and restaurant retirement costs line items within the accompanying consolidated statement of operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The following table provides quantitative information concerning the Company's leases under ASC 842, Leases.
| For the Period For the Year Ended December 30, 2024 | from June 17, | 2023 through January 1, 2024 | For the Period | January 3, 2023 through June 16, 2023 | from | |
|---|---|---|---|---|---|---|
| Finance lease expense: | $ 2,699 | $ | 1,201 | $ | 674 | |
| Amortization of ROU assets | 1,396 | 455 | 237 | |||
| Interest expense on lease liabilities | 1,303 | 746 | 437 | |||
| Operating lease expense | 14,873 | 9,117 | 8,801 | |||
| Variable lease expense | 3,524 | 1,171 | 920 | |||
| Sublease income | (2,006) | (1,858) | (1,029) | |||
| Total net lease cost | $ 21,879 | $ | 9,631 | $ | 9,366 | |
| Other lease information | ||||||
| Cash paid for amounts included in the | ||||||
| measurement of lease liabilities | ||||||
| Operating cash flows from finance leases | $ 1,303 | $ | 746 | $ | 437 | |
| Operating cash flows from operating | ||||||
| leases | 17,434 | 8,154 | 8,250 | |||
| Financing cash flows from finance leases | 582 | 254 | 159 | |||
| Right-of-use assets obtained in exchange for new | ||||||
| finance lease liabilities | $ 7,481 | $ | 8,283 | $ | 7,808 | |
| Right-of-use assets obtained in exchange for new | ||||||
| operating lease liabilities | $ 664 | $ | 1,006 (Successor) December 30, 2024 | $ | 1,058 January 1, 2024 | |
| Weighted-average remaining leas |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the variable lease cost for the period from June 17, 2023, through January 1, 2024, was $1,171.
Variable lease costs for Checkers can include contingent rental provisions based on percentages of gross sales if an established threshold is met. These costs are recognized once the minimum sales volume is expected to be achieved.
For a prospective Checkers franchisee, understanding variable lease costs is crucial because these expenses can fluctuate based on sales performance. While the FDD indicates that contingent rent expense was not material for the stated periods, it is important to understand the terms of the lease agreement to project potential expenses accurately. Franchisees should carefully review their lease agreements and sales projections to anticipate potential variable lease costs.