Under Checkersrallys' self-insurance plan, where are the liabilities for self-insurance presented on the consolidated balance sheets, and what were the amounts as of January 1, 2024 (Successor) and January 2, 2023 (Predecessor) for both the current and non-current portions?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
orable than estimated, a resulting expense reduction may be recorded. The Company maintained a $2.1 and $2.0 million letter of credit as of January 1, 2024 (Successor) and January 2, 2023 (Predecessor), respectively, as collateral securing general liability claims and self-insured workers' compensation claims until they are settled. The Company is also self-insured, subject to umbrella policies, for health care claims for eligible participating employees, subject to certain deductibles and limitations. The liabilities for self-insurance are presented on an undiscounted basis in the accompanying consolidated
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, the company is partially self-insured for a portion of its expected losses under its workers' compensation and general liability programs. The liabilities for self-insurance are presented on an undiscounted basis in the consolidated balance sheets. These liabilities are divided into two categories: the "current portion of accrued self-insurance" and "accrued self-insurance, less current portion."
As of January 1, 2024 (Successor), the "current portion of accrued self-insurance" was $1.6 million, and the "accrued self-insurance, less current portion" was $2.2 million. As of January 2, 2023 (Predecessor), the "current portion of accrued self-insurance" was $1.7 million, and the "accrued self-insurance, less current portion" was $2 million.
These figures represent Checkersrallys' estimated liabilities for self-insurance, reflecting the amounts the company expects to pay for claims covered under its self-insurance programs. It is important to note that these reserves are based on estimates and assumptions, which could change if actual claims differ from these estimates. Checkersrallys also maintained letters of credit of $2.1 million and $2.0 million as of January 1, 2024 (Successor) and January 2, 2023 (Predecessor), respectively, as collateral securing general liability and self-insured workers’ compensation claims until they are settled.