Does the text specify if the financial statements of Checkersrallys include a statement of retained earnings?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
- | | (98,648) | | Income tax expense (benefit) | | (24,723) | | 540 | | (7,542) | | Net income (loss) | $ | 21,260 | $ | (2,570) | $ | (91,106) |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(In Thousands)
| Successor | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Additional Paid-in Capital | Retained Earnings (Deficit) | Total Stockholders' Equity | ||||||
| Balances at June 17, 2023 | $ | - | $ | - | $ | - | $ | - | |
| Contribution from business combination | - | 97,819 | - | 97,819 | |||||
| Stock-based compensation | - | 132 | - | 132 | |||||
| Co-op retained earnings adjustment | - | - | (86) | (86) | |||||
| Net loss | - | - | (2,570) | (2,570) | |||||
| Balances at January 1, 2024 | - | 97,951 | (2,656) | 95,295 | |||||
| Stock-based compensation | - | 498 | - | 498 | |||||
| Co-op retained earnings adjustment | - | - | 181 | 181 | |||||
| Net income | - | - | 21,260 | 21,260 | |||||
| Balances at December 30, 2024 | $ | - | $ | 98,449 | $ | 18,785 | $ | 117,234 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | Successor | | | Predecessor | | | |------------------------------------------------------------
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the financial statements include information about retained earnings (or deficit). Specifically, the balance sheets provided for both the Successor and Predecessor companies include line items for "Retained Earnings (Deficit)" and "Accumulated Earnings (Deficit)" respectively. These sections detail changes in retained earnings due to items like net income/loss, stock-based compensation, and co-op retained earnings adjustments over different periods.
For a prospective Checkersrallys franchisee, this indicates that the company's financial performance is tracked and reported in terms of retained earnings, which is a common measure of profitability and financial health. The presence of this information allows potential investors and franchisees to assess how the company has managed its earnings over time. A consistent increase in retained earnings generally suggests that the company is profitable and reinvesting its earnings effectively.
However, it's important to note that the provided financial statements also show instances of net losses and accumulated deficits for certain periods, particularly for the Predecessor company. This could be a point of concern and requires further investigation to understand the reasons behind these losses and the strategies Checkersrallys has in place to address them. A potential franchisee should carefully review these figures and seek clarification from the franchisor regarding the factors influencing the company's profitability and financial stability.
Overall, while the inclusion of retained earnings information provides valuable insights into Checkersrallys's financial performance, prospective franchisees should conduct thorough due diligence and seek professional advice to fully understand the implications of the financial statements and assess the risks and opportunities associated with investing in a Checkersrallys franchise.