As of December 30, 2024 and January 1, 2024, what were the self-insurance balances for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ber of claims occur compared to original estimates or if the cost of those claims is higher than anticipated, liabilities for selfinsurance may not be sufficient and additional expense may be recorded. Should the actual claims experience be more favorable than estimated, a resulting expense reduction may be recorded. The Company maintained a $2.1 million and $2.1 million letter of credit as of December 30, 2024 (Successor) and January 1, 2024 (Successor), respectively, as collateral securing general liability claims and selfinsured workers' compensation claims until they are settled. The Company is also self-insured, subject to umbrella policies, for health care claims for eligible participating employee
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the company maintains self-insurance reserves for potential losses related to workers' compensation, general liability, and healthcare claims for eligible employees. These reserves are based on estimates from a third-party specialist, who analyzes historical industry data, and Checkersrallys's own historical data. These estimates are adjusted as needed to reflect changing circumstances.
As of December 30, 2024, Checkersrallys's self-insurance balance was $4.3 million. As of January 1, 2024, the self-insurance balance was $3.8 million. Additionally, Checkersrallys maintained a letter of credit of $2.1 million as of both December 30, 2024, and January 1, 2024, to secure general liability and workers' compensation claims until they are settled.
These self-insurance liabilities are presented on an undiscounted basis on Checkersrallys's consolidated balance sheets. Prospective franchisees should understand that these figures reflect Checkersrallys's financial strategy for managing risk and potential liabilities. Significant changes to these balances in the future could indicate shifts in Checkersrallys's claims experience or risk management practices.