What was the stated purpose of the proceeds from the Term Loans for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The proceeds of the Additional Second Lien Term Loans, net of original issue discount, were presented within "long-term debt, less current maturities and deferred financing costs" on the consolidated balance sheets. The proceeds were available to the Company to use for capital expenditures and general business expenses.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the proceeds from the Additional Second Lien Term Loans were intended for specific uses within the company. The document states that the proceeds, net of an original issue discount, were to be used for capital expenditures and general business expenses.
This means that Checkersrallys allocated these funds to invest in long-term assets or projects (capital expenditures) and to cover day-to-day operational costs (general business expenses). For a potential franchisee, this indicates how Checkersrallys manages its financial resources and prioritizes investments.
The fact that the proceeds were used for capital expenditures suggests that Checkersrallys invests in improving or expanding its existing infrastructure, which could benefit franchisees through better facilities or updated equipment. The allocation for general business expenses ensures the smooth operation of the business, which can positively impact franchisees by providing necessary support and resources.