Does the text specify any segment information disclosed in the Checkersrallys financial statements?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
d insurance premiums | | 1,741 | | (1,540) | | (518) | | Non-cash interest | | 5,201 | | 2,534 | | 13,808 | | | | | | | | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS PURPOSE AND ORGANIZATION
Checkers Drive-In Restaurants, Inc. ("Checkers", "CDI", the "Company", "we", "our", or "us"), owns and operates and franchises quick service restaurants in the United States under two similar operating brands, Checkers and Rally's ("Checkers" and "Rally's").
As of December 30, 2024 (Successor) and January 1, 2024 (Successor) there were approximately 230 and 240 corporate owned locations, respectively. As of December 30, 2024 (Successor) and January 1, 2024 (Successor) there were approximately 530 and 550 franchise owned locations, respectively.
We have a national footprint under our Checkers and Rally's brands, with strongholds in the Southeast, Mid-Atlantic and Midwest, as well as a footprint in the western United States, including California, Nevada and Arizona. Throughout our system of restaurants, we are known for our signature buildings and design that evoke timeless American imagery and for providing customers with bold and flavorful food at an attractive value.
CDI was founded in 1986 in Mobile, Alabama, with a mission to provide customers with a bold and flavorful alternative to the standard burgers served by large hamburger quick service restaurant chains. We have focused on, and continue to provide, a differentiated menu with robust made-to-order offerings, delivered to customers at an exceptional value.
In September 1991, CDI was incorporated as a Delaware corporation. We conduct business under our corporate name and the names Checkers and Rally's. We have owned, operated and franchised Checkers restaurants since 1991 and Rally's restaurants since our merger with Rally's in August 1999.
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").
The consolidated financial statements present the results of the operations, financial position and cash flows of CDI, and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We consolidate all entities where the Company is deemed to have a controlling or voting financial interest, including those that are wholly owned subsidiaries.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, the company owns, operates, and franchises quick-service restaurants under the Checkers and Rally's brands. As of December 30, 2024, Checkersrallys had approximately 230 corporate-owned and 530 franchise-owned locations. As of January 1, 2024, there were approximately 240 corporate-owned and 550 franchise-owned locations. The financial statements consolidate the results of Checkers Drive-In Restaurants, Inc. and its subsidiaries, eliminating all significant intercompany accounts and transactions. The company consolidates entities where it has a controlling financial interest. The financial statements do not provide a breakdown of performance or financial position by brand (Checkers vs. Rally's) or by company-operated versus franchised locations. Instead, the financial statements present the consolidated results of the entire Checkersrallys system. Therefore, prospective franchisees will not be able to analyze the individual performance of each brand or type of location from the provided financial statements.
Checkersrallys includes contributions to the Checkers/Rally's National Production Fund (NPF) in advertising expense within its consolidated statements of operations. The NPF is established for creating and producing advertising for both company-operated and franchised restaurants. Contributions to the Fund represent 0.5% of net restaurant sales, while contributions to advertising co-ops range from 0.5% to 4.25% of net restaurant sales. The company also makes contributions to Checkers and Rally's Distribution and Services, Inc. (CDSI) which are included within "restaurant food and paper costs" in the consolidated statements of operations. These related-party transactions are disclosed in the notes to the consolidated financial statements, providing some transparency into the financial relationships within the Checkersrallys system.
While the financial statements provide a consolidated view of Checkersrallys' financial performance, they do not offer segmented information that would allow a prospective franchisee to evaluate the performance of individual brands (Checkers or Rally's) or the differences between company-operated and franchised locations. A potential franchisee may want to ask Checkersrallys for more detailed financial information, including any internal reports that break down performance by brand or location type. Understanding these differences could be crucial in assessing the potential profitability and risks associated with investing in a Checkersrallys franchise.