[Item 3: LITIGATION]

ITEM 3 LITIGATION

Pending Litigation:

Checkers Drive-In Restaurants, Inc., v. Baby Buford, LLC, et. al., (Case No. 20-21749- Civ-COOKE), U.S. District Court for the Southern District of Florida

Baby Buford, LLC, Baby Buford HP, LLC, Baby Buford Warren, LLC, Baby Buford 8 Mile, LLC, Baby Buford Southfield, LLC, Baby Buford 23 Mile Road, LLC, Baby Buford Livernois, LLC, Baby Buford Woodward, LLC, Baby Buford 14 Mile, LLC, Baby Buford Port Huron, LLC, Baby Buford Ypsilanti, LLC, Baby Buford Sylvan Lake, LLC, and Baby Buford Harper, LLC (collectively hereafter referred to as "Baby Buford") are former Checkers franchisees. On December 19, 2019, we terminated the franchise agreements based on failure

to pay required advertising contributions. On March 30, 2020, Baby Buford filed a single Demand for Arbitration against us seeking $299,999 in damages and alleging that (i) their franchise agreements had been wrongfully terminated in violation of the Michigan Franchise Investment Law, and (ii) we misappropriated and comingled advertising contributions made by Baby Buford. We deny any wrongdoing in this matter and all claims made by Baby Buford. On April 27, 2020, we filed a Petition to Compel Arbitration in Federal Court in which we asserted that the franchise agreements require a separate arbitration for each franchise entity. The Court agreed and, on January 6, 2021, the Court entered an Order staying the current arbitration and requiring separate arbitrations should Baby Buford wish to proceed. The claimants have taken no further action since the Court's January 6, 2021 order and do not appear to be actively pursuing their claims, although the arbitration action has not been withdrawn at this time.

Concluded Litigation:

[Item 7: ESTIMATED INITIAL INVESTMENT]

Except as otherwise noted, none of these payments are refundable. These payments are only estimates and your costs may be higher, depending on your particular circumstances. We do not offer any financing for your initial investment.

If you purchase an existing company-owned Checkers Restaurant or Rally's Restaurant, you may have to make a greater or smaller investment, depending on the

circumstances, than the estimated initial investment shown above. The price and terms of payment for that Checkers Restaurant or Rally's Restaurant will be established by mutual agreement. You also will pay a $10,000 asset transfer fee in addition to the initial franchise fee for that location.

[Item 3: LITIGATION]

Franchisor Initiated Litigation in the Past Fiscal Year:

Claim for Indemnification – Loan Default

Southern Shoals, LLC v. 2-32C Wheeler Road, Inc. et al., Index No.: 620912/2023, pending in the Supreme Court of New York, County of Suffolk. Southern Shoals, LLC, alleges that it is the assignee of a Loan and Security Agreement entitling it to foreclose on collateral located at three franchised Checkers Restaurants. Checkers was incorrectly named as a defendant and subsequently filed a cross claim seeking indemnification from the franchisee .

Other than the actions above, no litigation is required to be disclosed in this Item.

[Item 21: FINANCIAL STATEMENTS]

Company as Lessor

The Company subleases land and buildings associated with the sale of certain Company-operated restaurants with terms of, or renewable to, 10 to 15 years with no option to purchase. The Company determines the sublease term by assuming exercise of renewal options that are reasonably certain to be exercised. The Company continues to be responsible for the rent payments to the original lessors. The subleases are evaluated for classification as operating, direct financing or sales-type leases. The Company has elected the practical expedient to account for lease components and non-lease components as a single lease component for all underlying classes of assets. The subleases generally obligate the sublessee to pay for costs associated with property taxes, insurance and maintenance costs and are considered to be variable. Variable sublease rental income recorded for the periods ended January 1, 2024 (Successor), June 16, 2023 (Predecessor), January 3, 2023 (Predecessor) and January 2, 2022 (Predecessor), was $0.1 million, $0.3 million and $0.3 million, respectively.

[Item 23: RECEIPTS]

EXHIBIT I

DISCLOSURE ADDENDA FOR REGISTRATION STATES

ADDENDUM TO THE CHECKERS DRIVE-IN RESTAURANTS, INC. FRANCHISE DISCLOSURE DOCUMENT FOR THE STATE OF CALIFORNIA

• 1. THE CALIFORNIA FRANCHISE INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE FRANCHISE DISCLOSURE DOCUMENT AT LEAST 14 DAYS PRIOR TO EXECUTION OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST 14 DAYS PRIOR TO THE RECEIPT OF ANY CONSIDERATION, WHICHEVER OCCURS FIRST.
• 1. Registration of this franchise does not constitute approval, recommendation, or endorsement by the Commissioner of the Department of Financial Protection and Innovation.
• 1. The "Special Risks to Consider about This Franchise" cover page is amended by adding the following:

Personal Guarantee: Franchisees and all owners must sign a personal guarantee, making you and your spouse individually liable for your financial obligations under the agreement if you are married. The guarantee will place your and your spouse's marital and personal assets at risk if your franchise fails.

| PROVISION | SECTION IN FRANCHISE OR OTHER AGREEMENT | SUMMARY | |---|---|---| | u. Dispute resolution by negotiation, mediation & arbitration | Section 18.05 | All controversies, disputes or claims shall on demand by either party be arbitrated. |

[Item 21: FINANCIAL STATEMENTS]

Accounts and Notes Receivable, Net

Receivables consist primarily of royalties, rents, franchise fees and notes due from franchisees and are recorded net of an allowance for credit losses. Franchisee related accounts receivable are due within 10 days of billing and in some instances we draw the funds directly from the franchisee's bank account on a predetermined day. Although the Company maintains an allowance for credit loss, the majority of the balance relates to specific accounts where collection is not expected. The reserves are established using the specific identification method based on our best estimate of the collectible balance. When determining collectability, we evaluate the debtor's financial condition, the historical experience with the debtor, and the pledged security interest value, if any. The Company has traditionally experienced a high rate of collection as the franchise agreements frequently provide remedy to the Company in the event of the franchisee's default on outstanding balances through a security interest in the assets of the business when a sublease is in place or through a personal guarantee of the franchisee.