What was the original amount of the Revolver under the First Lien Credit Agreement for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| January 1, 2024 (Successor) | January 2, 2023 (Predecessor) | |
|---|---|---|
| Related party note maturing April 25, 2024 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin, Interest is paid quarterly. | $ = | $ 181,913 |
| Related party Restatement Date Term Loan maturing April 25, 2023 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. Interest is paid quarterly. | e | 19,244 |
| Related party note maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin, Interest is capitalized on all payment dates. | *: | 65,126 |
| Related party amended note maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. Interest is capitalized on all payment dates. | 5 | 31,066 |
| Related party revolver maturing April 25, 2025 bearing interest at LIBOR plus an applicable margin or an alternative base rate plus an applicable margin. | 2: | 1,000 |
| Obligations under premium financing arrangements, with short-term maturities | 1,028 | 1,127 |
| Financing obligations relating to restaurant sales maturing at various dates through October 1, 2039, bearing interest rates ranging from $3.20%$ to $7.06%$ | 7,923 | 8,640 |
| Last-Out Term Loans, maturing June 16, 2028, bearing interest at an alternative base rate plus 8% or the Adjusted Term SOFR plus 9% plus a credit adjustment spread. Company has option to pay interest in kind at a rate equal to 6% rather than in cash. | 76,952 | ie. |
| New Money Loans, maturing June 16, 2027, bearing interest at an alternative base rate plus 6% or the Adjusted Term SOFR plus 7% plus a credit adjustment spread. Company has option to pay interest in kind at a rate equal to 4% rather than in cash. | 10,081 | |
| Deferred financing and issuance costs, net | (447) | (4,539) |
| Total debt, financing obligations, and credit facility | 95,537 | 303,577 |
| Less current maturities | (1,879) | (295,004) |
| Total debt, financing obligations, and credit facility, less current maturities | $ 93,658 | $ 8,573 |
Predecessor Debt Agreements
Related Party Credit Facility
On April 25, 2017, Holdings entered into a first lien credit agreement (the "First Lien Credit Agreement") and second lien credit agreement (the "Second Lien Credit Agreement") with Jefferies Finance LLC as administrative agent, joint lead arranger and joint bookrunner, and the financial institutions party thereto. The First Lien Credit Agreement consisted of (i) a $192.5 million First Lien Term Loan maturing on April 25, 2024 and (ii) a $25.0 million Revolver maturing
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the First Lien Credit Agreement, established on April 25, 2017, included a $25.0 million Revolver that was set to mature on April 25, 2022. This Revolver was part of a broader financial arrangement that also incorporated a $192.5 million First Lien Term Loan and an $87.5 million Second Lien Term Loan.
For a prospective Checkersrallys franchisee, understanding these details of the company's debt structure is crucial. The Revolver, as a line of credit, would have provided Checkersrallys with readily available funds for operational needs or investments. The maturity dates of these financial instruments indicate the timeline within which Checkersrallys was obligated to address these debts, potentially influencing the company's financial strategies and resource allocation.
The presence of both First and Second Lien Term Loans, along with the Revolver, suggests a layered approach to financing the merger, with different levels of security and repayment priority. Monitoring how Checkersrallys manages and restructures its debt can offer insights into the company's financial health and its ability to support its franchisees. Franchisees should consider these factors as part of their due diligence, assessing the stability and long-term prospects of the franchise system.