What was the amount of Checkersrallys' obligations under premium financing arrangements with short-term maturities?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligations under premium financing arrangements, with short- | ||
|---|---|---|
| term maturities. | $976 $ | 1,028 |
| to pay interest in kind at a rate equal to 6% rather than in cash. | ||
| --- | --- | --- |
| As of December 30, 2024 and January 1, 2024 the effective | ||
| interest rates were 15.16% and 15.18%, respectively. | 80,988 | 76,952 |
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, the obligations under premium financing arrangements with short-term maturities were $976 in 2024 and $1,028 in 2023. These obligations reflect amounts the company owes under arrangements to finance insurance premiums, with maturities extending for a short term.
Additionally, the effective interest rates associated with these arrangements were 15.16% as of December 30, 2024, and 15.18% as of January 1, 2024. There were also obligations to pay interest in kind at a rate equal to 6% rather than in cash. This means that instead of paying the interest in cash, the amount of the interest is added to the principal balance of the financing arrangement, increasing the total amount owed.
For a prospective franchisee, this indicates that Checkersrallys utilizes premium financing arrangements, and it is important to understand the terms, interest rates, and conditions associated with such financing. The franchisee should consider these obligations when assessing the overall financial health and stability of Checkersrallys.