What was the total advertising expense for Checkersrallys for the year ended December 30, 2024?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ings (deficit) | 18,785 | (2,656) | | Total stockholders' equity | 117,234 | 95,295 | | Total liabilities and stockholders' equity | $ 455,780 | $ 460,717 | | | | |
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
| Successor | Predecessor | |||||
|---|---|---|---|---|---|---|
| Year Ended December 30, 2024 | Period from June 17, 2023 through January 1, 2024 | Period from January 3, 2023 through June 16, 2023 | ||||
| Revenues | ||||||
| Restaurant sales | $ | 255,474 | $ | 141,217 | $ | 130,191 |
| Franchise and retail royalty revenue | 35,389 | 18,608 | 15,385 | |||
| Franchise fees and other income | 9,518 | 5,317 | 4,061 | |||
| Total revenues | 300,381 | 165,142 | 149,637 | |||
| Costs and expenses | ||||||
| Restaurant food and paper costs | 81,660 | 45,102 | 41,194 | |||
| Restaurant labor costs | 79,230 | 44,446 | 38,348 | |||
| Restaurant occupancy costs | 22,378 | 11,778 | 11,145 | |||
| Restaurant depreciation | 5,871 | 2,524 | 7,529 | |||
| Other restaurant operating expenses | 34,053 | 20,357 | 17,423 | |||
| General and administrative expenses | 39,215 | 19,435 | 36,471 | |||
| Franchise support and service expenses | 5,226 | 3,634 | 1,696 | |||
| Advertising expense | 14,397 | 8,077 | 6,810 | |||
| Other depreciation and amortization | 3,441 | 2,093 | 900 | |||
| Restaurant retirement costs | 139 | 300 | 596 | |||
| Impairment of long-lived assets | 2,384 | 623 | 66,633 | |||
| Net loss on disposal of fixed assets | 64 | 670 | 839 | |||
| Total costs and expenses | 288,058 | 159,039 | 229,584 | |||
| Operating income (loss) | 12,323 | 6,103 | (79,947) | |||
| Other income (expense) | ||||||
| Interest expense | (15,789) | (8,134) | (18,326) | |||
| Other income (expense) | 3 | 1 | (375) | |||
| Total other (expense) income | (15,786) | (8,133) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the advertising expense for the year ended December 30, 2024, was $14,397. This figure reflects the costs Checkersrallys incurred for advertising and promotional activities during that fiscal year. Franchisees should understand that this expense is a component of the overall costs and expenses that contribute to the financial performance of Checkersrallys.
It's important to note that Checkersrallys and its franchisees contribute a percentage of sales to the Checkers/Rally's National Production Fund, Inc. (NPF), which is used for creating and producing advertising for both company-operated and franchised restaurants. The company's contributions to the NPF are included in the advertising expense reported in the consolidated statements of operations. Additionally, some company-operated restaurants and franchisees participate in advertising co-ops.
The contributions to the Fund represent 0.5% of net restaurant sales, while contributions to the advertising co-ops range from 0.5% to 4.25% of net restaurant sales. These co-ops are either consolidated by Checkersrallys if they control them or accounted for similarly to the fund if Checkersrallys does not control them. This multi-faceted approach to advertising, involving both a national fund and local co-ops, suggests that franchisees may have some level of input or control over advertising strategies and expenditures in their specific markets.