How does Checkersrallys amortize deferred financing costs?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
maturities of long-term debt and financing obligations" and $0.3 million relating to capital lease obligations recorded within "financing obligations, less current maturities," in the accompanying consolidated balance sheets.
(Tabular Dollars in Thousands, Except Share and per Share Data)
Deferred Financing and Issuance Costs
In 2021, in connection with the Second Amendment to the Amended and Restated Term Loans and revolver, the Company incurred debt issuances costs of $7.9 million, $1.6 million of which were applied to the First Lien Term loan, $1.3 million which were applied to the Second Lien Term Loan and $5.0 million of which were applied to the Additional Second Lien Term Loan. Deferred issuance costs were recorded as deferred financing and issuance costs and will be amortized over the life of the related debt using the effective interest method. Deferred financing and issuance costs were not recorded on the Company's financial statements associated with any debt entered into prior to the Allocation Agreement an
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, deferred issuance costs are recorded as deferred financing and issuance costs. These costs are then amortized over the life of the related debt using the effective interest method.
In 2021, Checkersrallys incurred $7.9 million in debt issuance costs related to the Second Amendment to the Amended and Restated Term Loans and revolver. Of this amount, $1.6 million was applied to the First Lien Term loan, $1.3 million to the Second Lien Term Loan, and $5.0 million to the Additional Second Lien Term Loan.
The deferred financing costs are included as a deduction from the related debt balance in "long-term debt, less current maturities and deferred financing costs" in the consolidated balance sheets as of January 2, 2023 and January 3, 2022.