What interest rates applied to borrowings under the Revolver for Checkersrallys, and how were they determined?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Borrowings under the Revolver incurred interest, at the Company's option, at either (i) the LIBOR rate plus 4.25% or (ii) the alternative base rate plus 3.25% (in each case, as defined in the First Lien Restated Credit Agreement). The Revolver was required to be guaranteed by domestic subsidiaries of the Company and was secured by substantially all of the Company's and any subsidiary guarantor's assets. The Revolver contained customary representations and warranties, subject to limitations and exceptions, and customary covenants and events of default.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, borrowings under the Revolver incurred interest at the Company's option, at either (i) the LIBOR rate plus 4.25% or (ii) the alternative base rate plus 3.25%. The interest rate was determined based on the First Lien Restated Credit Agreement definitions.
The Revolver was required to be guaranteed by domestic subsidiaries of Checkersrallys and was secured by substantially all of the Company's and any subsidiary guarantor's assets. This means that Checkersrallys's assets, as well as those of its domestic subsidiaries, could be used as collateral for the Revolver.
The Revolver also contained customary representations and warranties, subject to limitations and exceptions, and customary covenants and events of default. These are standard terms in credit agreements that outline the responsibilities and obligations of Checkersrallys and the lender. A prospective franchisee should be aware of these terms as they could impact the financial flexibility of Checkersrallys.