What was the value of Checkersrallys' Operating Right-of-Use Assets?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
ignificant audit findings, and certain internal control-related matters that we identified during the audit.
Tampa, Florida April 1, 2025
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
| Successor | ||
|---|---|---|
| December 30, | January 1, | |
| 2024 | 2024 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $ 15,562 | $ 12,557 |
| Accounts and notes receivable, net | 7,717 | 7,399 |
| Inventory | 2,428 | 2,178 |
| Prepaid expenses | 5,338 | 5,308 |
| Other current assets | 799 | 2,867 |
| Total current assets | 31,844 | 30,309 |
| Property and equipment, net | 31,679 | 29,309 |
| Operating lease right-of-use assets | 132,807 | 145,380 |
| Finance lease right-of-use assets | 31 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, the value of their Operating Right-of-Use Assets is detailed in the financial statements. As of December 30, 2024 (Successor), the Operating lease right-of-use assets were valued at $132,807. Earlier, on January 1, 2024, the value was $145,380. These figures represent the company's rights to use leased assets for their operations.
Operating Right-of-Use Assets typically reflect the value of a company's right to use an asset (like property for a restaurant location) over the lease term. This accounting treatment stems from lease accounting standards requiring companies to recognize lease assets and liabilities on their balance sheets. The amounts are influenced by factors such as lease terms, rental rates, and discount rates used to calculate the present value of lease payments.
For a prospective Checkersrallys franchisee, understanding these figures is crucial because leases are a significant part of the restaurant business. The difference between the January 1, 2024, and December 30, 2024 values could reflect store closures, lease modifications, or other factors affecting the company's lease portfolio. Franchisees should inquire about the nature of Checkersrallys' lease obligations and how these assets are managed, as lease terms and occupancy costs will directly impact their profitability.
It is important to note that these assets are subject to write-offs if stores close or are deemed unprofitable. For example, the company wrote off $0.4 million in right-of-use operating lease assets for the period ended January 1, 2024, due to store closures. This highlights the risk associated with lease obligations and the importance of carefully evaluating location performance and lease terms.