What was the gross amount of franchise agreements for Checkersrallys as of January 1, 2024?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
----------------|---------|--|--| | Tradenames | $ 197,500 | $ | 225,900 | | | | Finite-lived intangible assets, net | 1,349 | | 26,335 | | | | Intangible assets, net | $ 198,849 | $ | 252,235 | | |
Finite-lived intangible assets, net consisted of the following as of January 1, 2024 (Successor) and January 2, 2023 (Predecessor):
| January 1, 2024 (Successor) | Januar | y 2, 2 | 023 (Prede | cesso | or) |
|---|
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, as of January 1, 2024, the gross amount of franchise agreements was $1,400,000. This figure represents the total value of franchise agreements before accounting for accumulated amortization. Amortization is the process of gradually writing off the initial cost of an asset over its useful life.
For a prospective Checkersrallys franchisee, this number provides insight into the overall valuation of the franchise agreements held by the company. However, it's important to note that this gross amount doesn't reflect the actual current value of these agreements due to the effects of amortization. The accumulated amortization as of the same date was $51,000, resulting in a net value of $1,349,000.
Understanding the gross amount, accumulated amortization, and net value of franchise agreements can help a potential franchisee assess the financial health and stability of Checkersrallys. It's also important to consider how Checkersrallys amortizes these agreements, which, in this case, is over 15 years for Successor agreements and 27 years for Predecessor agreements, using a straight-line method. This information is crucial for conducting thorough due diligence before investing in a Checkersrallys franchise.