In the Checkersrallys Out-of-Court Restructuring agreement, what date was the restructuring agreement executed?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
deferrals due to cash received and other | | 439 | | 403 | | | Revenue recognized during the period | | (1,068) | | (858) | | | Deferred franchise fees at end of period | $ | 9,025 | $ | 9,654 | |
NOTE 4 - BUSINESS COMBINATION
Out-of-Court Restructuring
As discussed in Note 1. Description of Business, the Out-of-Court Restructuring agreement, executed on June 16, 2023 (the "restructuring date"), resulted in Topco acquiring all of the voting interests of Burger BossCo. As a result, Topco gained control of Burger BossCo and the transaction was determined to be a business combination in accordance with ASC 805 and is accounted for in accordance with the acquisition method of accounting. As the accounting acquirer, Topco will recognize the assets acquired and liabilities assumed at fair value as of the acquisition date. As an indirect subsidiary of the accounting acquirer, the Company has elected to apply pushdown accounting, whereby it will also recognize the assets acquired and liabilities assumed at fair value as of the acquisition date.
The total stock consideration w
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the Out-of-Court Restructuring agreement was executed on June 16, 2023. This restructuring resulted in Checkers Topco acquiring all of the voting interests of Burger BossCo, leading to Topco gaining control of Burger BossCo. The transaction was classified as a business combination under ASC 805, and it was accounted for using the acquisition method.
As the accounting acquirer, Topco recognized the assets acquired and liabilities assumed at fair value as of the acquisition date. Checkersrallys, as an indirect subsidiary of the accounting acquirer, elected to apply pushdown accounting, also recognizing the assets acquired and liabilities assumed at fair value on the same date.
The total stock consideration for this transaction amounted to $97.8 million, comprising 90 shares of Burger BossCo acquired by Topco. A third-party valuation specialist determined the fair value of the stock consideration using market and income approaches, with the results appropriately weighted. This restructuring and subsequent accounting adjustments are important for prospective franchisees to understand, as they reflect significant changes in the financial structure and ownership of Checkersrallys.