Does the text specify if the Checkersrallys financial statements are consolidated?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
, FL 33602
D +1 813 229 7201 F +1 813 223 3015
GRANT THORNTON LLP REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors Checkers Drive-In Restaurants, Inc. and Subsidiaries
Opinion
We have audited the consolidated financial statements of Checkers Drive-In Restaurants, Inc. and Subsidiaries (the "Company"), which comprise the consolidated balance sheet as of December 30, 2024 (Successor) and the related consolidated statement of operations, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2024 (Successor), and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for opinion
We conducted our audit of the consolidated financial statements in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the financial statements are consolidated. The independent auditor's report explicitly states that they audited the "consolidated financial statements of Checkers Drive-In Restaurants, Inc. and Subsidiaries." This indicates that the financial statements include the financial results of Checkersrallys and all its subsidiary companies, presented as a single economic unit.
Furthermore, Note 1 to the financial statements, titled "Description of Business Purpose and Organization," confirms that the consolidated financial statements present the operations, financial position, and cash flows of CDI (Checkers Drive-In Restaurants, Inc.) and its subsidiaries. It also clarifies that all significant intercompany accounts and transactions have been eliminated during the consolidation process. This is a standard accounting practice to avoid inflating financial figures.
Additionally, Checkersrallys consolidates all entities where the company has a controlling financial interest, including wholly-owned subsidiaries. This means that the financial performance of any subsidiary that Checkersrallys controls is included in the overall financial picture presented in the consolidated statements. The notes also mention that the Checkers/Rally's National Production Fund, Inc. and Checkers and Rally's Distribution and Services, Inc. are not included in the consolidated financial statements.
For a prospective franchisee, understanding that the financial statements are consolidated is crucial because it provides a comprehensive view of Checkersrallys's financial health. However, it is also important to note which entities, like the National Production Fund and certain advertising co-ops, are not consolidated, as these may have separate financial implications for franchisees, particularly regarding advertising and supply chain costs.