What was the depreciation expense associated with Checkersrallys' property and equipment for the fiscal year ended December 30, 2024?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------------------------------------|------------------------------------------------|----------------------------------------| | | | 40,293 | 32,165 | | | Less: accumulated depreciation | | (8,614) | (2,856) | | | Property and equipment, net | $ | 31,679 | $ 29,309 | |
Depreciation expense associated with property and equipment, was $6.0 million, $2.9 million, and $7.9 million for the fiscal year ended December 30, 2024 (Successor) and for the periods from June 17, 2023 through January 1, 2024 (Successor) and from January 3, 2023 through June 16, 2023 (Predecessor), respectively.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Company capitalizes certain costs in development of internal-use software.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the depreciation expense associated with property and equipment was $6.0 million for the fiscal year ended December 30, 2024. This figure represents the accounting expense recognized by Checkersrallys for the reduction in value of its tangible assets, such as buildings, equipment, and vehicles, due to wear and tear, obsolescence, or other factors. Depreciation is a non-cash expense that reflects the allocation of an asset's cost over its useful life.
For a prospective Checkersrallys franchisee, understanding depreciation expense is crucial for assessing the company's financial performance and profitability. While depreciation itself doesn't involve a direct cash outflow, it impacts the company's net income and, consequently, its ability to reinvest in the business or distribute profits. A higher depreciation expense can indicate significant investments in fixed assets, which may be necessary for long-term growth but can also strain short-term profitability.
It's also important to note that Checkersrallys also reported depreciation expenses for other periods, including $2.9 million for the period from June 17, 2023, through January 1, 2024, and $7.9 million for the period from January 3, 2023, through June 16, 2023. These figures provide additional context for understanding the company's depreciation trends and asset management practices. Additionally, the company capitalizes certain costs in the development of internal-use software. As of December 30, 2024, the company had capitalized software costs of $0 million, net of accumulated amortization. Capitalized software amortization expense was $0.4 million for the fiscal year ended December 30, 2024.