How did Holdings Restated Credit Agreement convert the Revolver for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
er, and the financial institutions party thereto. Holdings also entered into an amendment to the Second Lien Credit Agreement (the "Second Lien Restated Credit Agreement") with Wilmington Trust, National Association (as successor to Jefferies Finance LLC), as administrative agent and collateral agent for the lenders party thereto.
Holdings Restated Credit Agreement converted $19.9 million in aggregate principal amount of Revolver into Restatement Date Term Loans ("RDTL") maturing April 25, 2022 leaving $5.1 million of Revolver. Within fiscal 2021, the maturity date of the RDTL and Revolver was extended to April 25, 2023.
Holdings Restated Credit Agreement amended the terms in that any interest on the loans accrued on or prior to June 14, 2021, shall be payable "in kind", which interest shall be capitalized and added to the outstanding principal balance of
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the Holdings Restated Credit Agreement converted $19.9 million of the Revolver into Restatement Date Term Loans (RDTL) that were set to mature on April 25, 2022. This conversion left $5.1 million remaining in the Revolver.
In 2021, the maturity date for both the RDTL and the remaining Revolver was extended to April 25, 2023. Additionally, the terms were amended such that any interest on the loans accrued up to June 14, 2021, would be payable "in kind." This meant the interest was capitalized, added to the outstanding principal balance of the loans on the interest payment dates, and then treated as principal accruing interest until June 14, 2021.
The treatment of interest as payable "in kind" was extended beyond the initial date of June 14, 2021, through the maturity date of the Second Lien within fiscal year 2021. This information is relevant for prospective Checkersrallys franchisees as it provides insight into the financial restructuring and debt management strategies employed by the parent company, which could indirectly affect the financial stability and operational decisions of the franchise system.