How were the deferred financing costs presented in Checkersrallys' consolidated balance sheets as of January 2, 2023 and January 3, 2022?

According to Checkersrallys' 2025 Franchise Disclosure Document, deferred financing costs were handled in a specific manner on the company's balance sheets. The deferred financing costs were included as a deduction from the related debt balance. This deduction was specifically within "long-term debt, less current maturities and deferred financing costs" in the consolidated balance sheets as of both January 2, 2023, and January 3, 2022.

For a prospective Checkersrallys franchisee, this means that when reviewing the company's financial statements, deferred financing costs are not presented as an asset. Instead, they reduce the reported amount of long-term debt. This accounting treatment provides a clearer picture of the company's net debt position.

This approach aligns with standard accounting practices, where deferred financing costs, representing expenses incurred to obtain financing, are amortized over the life of the debt. By deducting these costs from the debt balance, Checkersrallys provides a more conservative view of its financial leverage. Franchisees should be aware of this presentation when assessing the financial health and debt obligations of Checkersrallys.