Under what accounting standard does Checkersrallys account for leases as both a lessee and a lessor?

According to Checkersrallys's 2025 Franchise Disclosure Document, the company accounts for leases as both a lessee and a lessor in accordance with ASC 842, Leases. This means Checkersrallys follows the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 842, which provides guidelines on how leases should be recorded and reported in financial statements.

As a lessee, Checkersrallys leases real estate for the operation of its restaurants. As a lessor, Checkersrallys acts as a sublessor for the operation of certain franchised restaurants, particularly ground leases that it subleases to franchisees. This dual role requires Checkersrallys to apply the principles of ASC 842 from both perspectives, impacting how assets, liabilities, expenses, and income related to leases are recognized and measured.

For a prospective franchisee, this accounting standard is primarily relevant in understanding Checkersrallys's financial statements and how lease obligations and income are presented. Franchisees should be aware that Checkersrallys's financial health and lease management practices can affect the overall stability and support provided to franchisees. Reviewing the notes to the consolidated financial statements, particularly those related to leases, can provide insights into the company's lease commitments, sublease income, and related accounting policies.