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Checker’s5 Units in Michigan• Confidential Information Memorandum

• August 2018

Checker's- 5 Units in Michigan

Disclaimer:

FranBizNetwork (“FBN”), has been retained and by Grand Rapids Twin Drive-Thru Inc. (“Seller”) as exclusive broker for the sale of these five Checker's locations in MI (“Business”). This Confidential Information Memorandum (“CIM”) has been prepared by FBN from information supplied to it by the Seller and other sources believed to be reliable and is being furnished through FBN solely for the purpose of providing the recipient with general information to assist in an evaluation of the Business. This CIM does not purport to be all-inclusive or necessarily to contain all of the information a prospective purchaser may desire. FBN has not verified independently any of the information, nor does FBN make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this CIM or any other written or oral statement made to a prospective purchaser of the Business. Only those representations and warranties that may be made in a definitive written agreement, when and if it is executed, and subject to such limitations and restrictions as may be specified in such definitive agreement, shall have legal effect.

Interested parties should conduct their own investigation and analysis of the Business and of the information contained in this CIM and should consider the advice of their financial, legal, accounting, tax, and other business advisors in analyzing the books and records of the Business.

This CIM contains proprietary non-public information regarding the Business and is governed by the terms of the Confidentiality Agreement agreed to by the interested party receiving this CIM, which strictly limits the use, disclosure, circulation, and reproduction of the information contained herein. Any person receiving this CIM should carefully read and understand the Non-Disclosure Agreement they signed before reading further. https://www.franbiznetwork.com/wp-content/uploads/2014/08/NDA-for-Website-LC.pdf

This CIM may not be photocopied, reproduced, or distributed, without the prior written consent of FBN. By accepting this CIM, the recipient confirms that it is bound by, and will comply with, the provisions of the Confidentiality Agreement and agrees that all of the information contained herein and any related information which may be provided by Seller, or on its behalf, in connection with the Business will be treated by it in accordance with the Confidentiality Agreement.

FBN is acting as an exclusive broker to the Seller in connection with the proposed sale of this Business. Prospective purchasers agree not to contact the Seller or any of the Seller’s management or restaurant personnel. All communications, inquiries and requests for information regarding the Assets should be addressed to FBN.

https://www.franbiznetwork.com/wp-content/uploads/2014/08/NDA-for-Website-LC.pdf


FranBizNetwork is happy to bring to the market 5 Checker’s Drive-In locations near the Grand Rapids, MI area. Any questions or requests for further information should be directed to Buyer’s FBN advisor. Under no circumstances should prospective buyers contact Seller directly.

Carter Asefi(925) 391-2724 [email protected]

Emily Burns(925) 391-2726 phone

[email protected]

Overview of the sale process:• Buyer reviews the CIM and visits the stores as a customer, taking care to be

discreet and not alert employees or management to the sale• Buyer works with FBN advisor to submit application to Checker's• Buyer works with FBN advisor to make an offer, contingent upon full due

diligence review, franchisor approval, financing if required, and lease assignments.

• Buyer completes full review of the books and records of the business• Buyer is approved by franchisor and lender (if required)• Buyer attends franchisor training• Buyer and Seller complete walk-thrus of each restaurant making sure all

equipment is in good working condition.• Escrow closes and Buyer takes over the store


All stores are within 40 minutes of each other.

1 #3034 461 28th St., S.E., Grand Rapids, MI

2 #3137 4201 Alpine Ave., Comstock Park, MI

3 #3203 2860 E. Paris Ave., S.E., Kentwood, MI

4 #3297 1325 28th Street., S.W., Wyoming, MI

5 #3381 554 E. 8th Street, Holland, MI


▪ Price is $950,000 for the package▪ Stores are franchisee owned, franchise agreements will be assigned to buyer with remaining term▪ Price does not include inventory of approximately $5,000 per store or lease security deposits▪ Price does not include franchise transfer fees of $3,000 per store▪ This will be an asset sale, with all assets delivered free and clear of liens▪ Stores are within 40 minutes of each other▪ Seller is currently acting as Area Manager overseeing the stores▪ Franchisor requires a minimum of $750k net worth with at least $250k liquid assets, or commensurate with

purchase. Restaurant experience preferred but not required. Operating partner and one other person must attend 5 weeks of training- 4 weeks in the restaurant and 1 week in Tampa.

Overview

3034 461 28th St., S.E., Grand Rapids, MI $1,199,875 $127,012

3137 4201 Alpine Ave., Comstock Park, MI $730,672 $15,918

3203 2860 E. Paris Ave., S.E., Kentwood, MI $646,530 $18,463

3297 1325 28th Street., S.W., Wyoming, MI $848,535 $25,117

3381 554 E. 8th Street, Holland, MI $792,579 $31,546

TOTAL $4,218,191 $218,056

Store # AddressTrailing 12 Month

Sales thru 6/30/18

Trailing 12 Month

Pre-G&A EBITDA


▪ Headquartered in Tampa, FL, Checker's was founded in 1986 and now boasts over 577 units nationwide. Checkers acquired Rally’s in 1999. The two chains combine to make one of the fastest growing restaurants in the industry with more than 800 locations across the country. Known for their bold flavored and seared burgers, indulgent milkshakes, and Famous Seasoned Fries.

▪ Franchise agreements are set at 4% royalties and national advertising at .5% with another 3.5% going to co-op▪ $3,000 franchise transfer fee per store (not included in price)▪ Checkers & Rally’s was named a Best Franchise Deal by QSR Magazine in 2018▪ Entrepreneur Magazine “Franchise 500” Ranking – Top 100 fastest growing franchises in the U.S.▪ All stores are in compliance, no remodel requirements due in the next few years

Franchise:

Market:▪ The minimum wage in the state of Michigan is currently $9.25/hr. ▪ Kent County, which includes Grand Rapids, Comstock Park, Kentwood and Wyoming, has a median household income of

approximately $60K, and ranks 8th among the state's 29 counties with populations of at least 65,000.▪ The Holland store is located in Ottawa County where the population is approximately 33,000 and the median household

income is approximately $57K. Holland has a vibrant tourist economy and hosts many annual well-known events such as the Tulip Time festival and the Dutch WinterFest.


Sales History

StoreYE 2015

SalesYE 2016

Sales

% Change over YE

2015YE 2017

Sales% Change

over YE 2016T12 Sales Thru

June 2018% Change

over YE 2017Jan-June

2017Jan-June

2018 % Change

#3034 Grand Rapids, MI $1,146,071 $1,286,189 12.23% $1,238,779 -3.69% $1,199,875 -3.14% $627,222 $588,318 -6.20%

#3137 Comstock Park, MI $726,133 $768,552 5.84% $755,894 -1.65% $730,672 -3.34% $370,359 $345,137 -6.81%

#3203 Kentwood, MI $698,095 $732,814 4.97% $701,106 -4.33% $646,530 -7.78% $352,401 $297,825 -15.49%

#3297 Wyoming, MI $838,589 $913,534 8.94% $882,486 -3.40% $848,535 -3.85% $431,203 $397,252 -7.87%

#3381 Holland, MI $776,048 $747,925 -3.62% $806,918 7.89% $792,579 -1.78% $388,219 $373,880 -3.69%

TOTAL SALES $4,184,936 $4,449,014 6.31% $4,385,183 -1.43% $4,218,191 -3.81% $2,169,404 $2,002,412 -7.70%

Average Store Sales $836,987 $889,803 6.31% $877,037 -1.43% $843,638 -3.81% $433,881 $400,482 -7.70%

Executive Summary materials were derived from documents provided by Seller and were prepared by FranBizNetwork to help prospective Buyers complete a summary review. These materials should not replace the Buyer's review of actual books and records and a thorough due diligence process. Buyers should not rely on these materials as definitive, but should instead consult the actual due diligence documents.


Store

T12 Sales

Thru June

2018

Monthly

Rent

Monthly

Prop Tax

Total Annual

Occupancy

Costs

Occupancy

Costs as %

of Sales

Lease

Expiration

Lease

Options

Building

Size

Next Rent

Increase

#3034 Grand Rapids, MI $1,199,875 $4,800 $730 $66,360 5.5% 2028 2x5yr 759 SF 2% annually

#3137 Comstock Park, MI $730,672 $3,300 $732 $48,384 6.6% 2028 2x5yr

Approx

800 SF 2% annually

#3203 Kentwood, MI $646,530 $4,200 $829 $60,348 9.3% 2028 2x5yr

Approx

800 SF 2% annually

#3297 Wyoming, MI $848,535 $5,700 $686 $76,632 9.0% 2028 2x5yr

Approx

825 SF 2% annually

#3381 Holland, MI $792,579 $3,500 $685 $50,220 6.3% 2028 2x5yr

Approx

800 SF 2% annually

*CAM included in rent figures

Executive Summary materials were derived from documents provided by Seller and were prepared by FranBizNetwork to help prospective Buyers complete a summary review. These materials should not replace the

Buyer's review of actual books and records and a thorough due diligence process. Buyers should not rely on these materials as definitive, but should instead consult the actual due diligence documents.

Leases


Store

Business

Established

Franchise Agreement

Expiration

Hours of

Operation Employees Seating

#3034 Grand Rapids, MI 2002 2022

10a - 3a

daily 30

Approx 15

(Patio)

#3137 Comstock Park, MI 2002 2026

10a - 12a

daily 30

Approx 15

(Patio)

#3203 Kentwood, MI 2002 2027

10a - 12a

daily 30

Approx 15

(Patio)

#3297 Wyoming, MI 2002 2030

10a - 2a

daily 30

Approx 15

(Patio)

#3381 Holland, MI 2002 2034

10a - 1a

daily 30

Approx 15

(Patio)

Location Details

Executive Summary materials were derived from documents provided by Seller and were prepared by FranBizNetwork to help prospective Buyers complete a summary review.

These materials should not replace the Buyer's review of actual books and records and a thorough due diligence process. Buyers should not rely on these materials as

definitive, but should instead consult the actual due diligence documents.

-Royalties are 4% and nat'l advertising .5% with another 3.5% for co-op

-Transfer fees are $3000 per store (not included in price)

- Remodels due at the end of the franchise agreement, approx $125K each


Store #3034 461 28th St., S.E., Grand Rapids, MI

Sales: $1,199,875EBITDA: $127,012(Trailing 12 Mo Thru June 2018)

Located near the four lane intersection of 28th St., SE and Madison St., SE. This location is a double drive-thru maximizing speed, efficiency and sales. Busy US-131 is 1 mile to the west and supercenter Meijer is 1.5 miles to the east.

Nearby businesses include a CVS and Dollar Tree. A community center and two apartment complexes are all within 1 mile.

Nearby competition includes McDonalds, Burger King and Grand Coney.

Monthly rent is $4,800 and property tax is $730. Occupancy costs average 5.5% of sales at this location.

Seller owns the real estate. Lease expires in 2028 with 2x5 year options.


Store #3034 461 28th St., S.E., Grand Rapids, MI

Monthly SalesJan Feb Mar Apr May June July Aug Sep Oct Nov Dec TOTAL

2015 $72,224 $81,060 $100,784 $101,782 $103,241 $95,335 $103,416 $101,798 $94,311 $101,555 $92,027 $98,538 $1,146,071

2016 $82,117 $100,973 $109,058 $110,610 $117,774 $111,887 $115,003 $110,616 $109,817 $111,963 $100,999 $105,372 $1,286,189

$ +/- $9,893 $19,913 $8,274 $8,828 $14,533 $16,552 $11,587 $8,818 $15,506 $10,408 $8,972 $6,834 $140,118

% +/- 14% 25% 8% 9% 14% 17% 11% 9% 16% 10% 10% 7% 12%

2016 $82,117 $100,973 $109,058 $110,610 $117,774 $111,887 $115,003 $110,616 $109,817 $111,963 $100,999 $105,372 $1,286,189

2017 $79,640 $95,933 $114,424 $109,451 $113,966 $113,808 $107,939 $109,704 $99,329 $100,291 $94,560 $99,734 $1,238,779

$ +/- ($2,477) ($5,040) $5,366 ($1,159) ($3,808) $1,921 ($7,064) ($912) ($10,488) ($11,672) ($6,439) ($5,638) ($47,410)

% +/- -3% -5% 5% -1% -3% 2% -6% -1% -10% -10% -6% -5% -4%

2017 $79,640 $95,933 $114,424 $109,451 $113,966 $113,808 $107,939 $109,704 $99,329 $100,291 $94,560 $99,734 $1,238,779

2018 $84,332 $87,994 $107,941 $93,998 $103,569 $110,484 $0 $0 $0 $0 $0 $0 $588,318

$ +/- $4,692 ($7,939) ($6,483) ($15,453) ($10,397) ($3,324) ($38,904)

% +/- 6% -8% -6% -14% -9% -3% -6%


Store #3137 4201 Alpine Ave., Comstock Park, MI

Sales: $730,672EBITDA: $15,918(Trailing 12 Mo Thru June 2018)

Single drive thru located off of a busy area of Alpine Ave. Nearby big box stores include Menards, Walmart and Sam’s Club. Aldi, Art Van Furniture and a FedEx Center are also in close proximity to this location.

Nearby competition includes Culver’s, Sonic Drive-In and McDonald’s.




Store # 3137 4201 Alpine Ave., Comstock Park, MI


2015 $46,434 $46,729 $59,440 $64,791 $64,508 $64,196 $64,449 $63,710 $59,839 $68,125 $59,117 $64,795 $726,133

2016 $48,800 $55,280 $60,608 $63,214 $66,073 $63,504 $66,584 $71,260 $72,760 $71,443 $64,528 $64,498 $768,552

$ +/- $2,366 $8,551 $1,168 ($1,577) $1,565 ($692) $2,135 $7,550 $12,921 $3,318 $5,411 ($297) $42,419

% +/- 5% 18% 2% -2% 2% -1% 3% 12% 22% 5% 9% 0% 6%

2016 $48,800 $55,280 $60,608 $63,214 $66,073 $63,504 $66,584 $71,260 $72,760 $71,443 $64,528 $64,498 $768,552

2017 $50,744 $53,467 $64,615 $62,649 $68,328 $70,556 $66,143 $66,927 $64,015 $66,660 $61,699 $60,091 $755,894

$ +/- $1,944 ($1,813) $4,007 ($565) $2,255 $7,052 ($441) ($4,333) ($8,745) ($4,783) ($2,829) ($4,407) ($12,658)

% +/- 4% -3% 7% -1% 3% 11% -1% -6% -12% -7% -4% -7% -2%

2017 $50,744 $53,467 $64,615 $62,649 $68,328 $70,556 $66,143 $66,927 $64,015 $66,660 $61,699 $60,091 $755,894

2018 $50,069 $48,971 $62,495 $54,926 $62,577 $66,099 $0 $0 $0 $0 $0 $0 $345,137

$ +/- ($675) ($4,496) ($2,120) ($7,723) ($5,751) ($4,457) ($25,222)

% +/- -1% -8% -3% -12% -8% -6% -7%


Store #3203 2860 E. Paris Ave., S.E., Kentwood, MI


Single drive thru located near the intersection of E. Paris Ave., S.E. and 28th Ave., S.E.

Sam’s Club and Home Depot are located within approx. 1 mile. Kentwood Towne Center is directly behind this location and houses OfficeMax, Buy Buy Baby, Dollar Tree and Hobby Lobby. This Checker’s is located 2 miles west of Interstate 96.

Nearby competition includes Burger King and Steak-n-Shake.




Store # 3203 2860 E. Paris Ave., S.E., Kentwood, MI


2015 $47,250 $46,629 $57,324 $61,246 $59,532 $62,372 $63,474 $61,489 $58,475 $63,052 $56,503 $60,749 $698,095

2016 $47,561 $51,228 $56,052 $61,207 $64,445 $62,965 $62,536 $69,817 $64,873 $66,393 $62,033 $63,704 $732,814

$ +/- $311 $4,599 ($1,272) ($39) $4,913 $593 ($938) $8,328 $6,398 $3,341 $5,530 $2,955 $34,719

% +/- 1% 10% -2% 0% 8% 1% -1% 14% 11% 5% 10% 5% 5%

2016 $47,561 $51,228 $56,052 $61,207 $64,445 $62,965 $62,536 $69,817 $64,873 $66,393 $62,033 $63,704 $732,814

2017 $49,617 $50,309 $61,932 $59,346 $64,517 $66,680 $58,655 $63,824 $57,489 $59,665 $55,292 $53,780 $701,106

$ +/- $2,056 ($919) $5,880 ($1,861) $72 $3,715 ($3,881) ($5,993) ($7,384) ($6,728) ($6,741) ($9,924) ($31,708)

% +/- 4% -2% 10% -3% 0% 6% -6% -9% -11% -10% -11% -16% -4%

2017 $49,617 $50,309 $61,932 $59,346 $64,517 $66,680 $58,655 $63,824 $57,489 $59,665 $55,292 $53,780 $701,106

2018 $44,687 $43,343 $52,443 $47,007 $53,911 $56,434 $0 $0 $0 $0 $0 $0 $297,825

$ +/- ($4,930) ($6,966) ($9,489) ($12,339) ($10,606) ($10,246) ($54,576)

% +/- -10% -14% -15% -21% -16% -15% -15%


Store #3297 1325 28th Street., S.W., Wyoming, MI


This Checker’s location is a double drive-thru located on 28th St., S.W. between Burlingame Ave., S.W. and Michael Ave., S.W.

Rogers Towne Plaza is down the street and includes tenants GNC, Office Max and Planet Fitness. Wyoming High School and Wyoming Parks and Recreation are in close proximity to this location.

Nearby competition includes Burger King and McDonald’s.

Monthly rent is $5,700 and property tax is $686. Occupancy costs average 9% of sales at this location.



Store # 3297 1325 28th Street., S.W., Wyoming, MI


2015 $56,918 $59,017 $75,657 $79,960 $80,485 $75,460 $76,689 $71,659 $65,378 $68,859 $62,552 $65,955 $838,589

2016 $53,062 $64,037 $72,720 $76,980 $82,377 $81,737 $89,783 $90,102 $81,303 $82,500 $70,063 $68,870 $913,534

$ +/- ($3,856) $5,020 ($2,937) ($2,980) $1,892 $6,277 $13,094 $18,443 $15,925 $13,641 $7,511 $2,915 $74,945

% +/- -7% 9% -4% -4% 2% 8% 17% 26% 24% 20% 12% 4% 9%

2016 $53,062 $64,037 $72,720 $76,980 $82,377 $81,737 $89,783 $90,102 $81,303 $82,500 $70,063 $68,870 $913,534

2017 $60,232 $63,734 $73,484 $76,890 $77,802 $79,061 $79,256 $79,839 $75,173 $76,180 $70,957 $69,878 $882,486

$ +/- $7,170 ($303) $764 ($90) ($4,575) ($2,676) ($10,527) ($10,263) ($6,130) ($6,320) $894 $1,008 ($31,048)

% +/- 14% 0% 1% 0% -6% -3% -12% -11% -8% -8% 1% 1% -3%

2017 $60,232 $63,734 $73,484 $76,890 $77,802 $79,061 $79,256 $79,839 $75,173 $76,180 $70,957 $69,878 $882,486

2018 $56,740 $58,874 $73,387 $64,115 $70,007 $74,129 $0 $0 $0 $0 $0 $0 $397,252

$ +/- ($3,492) ($4,860) ($97) ($12,775) ($7,795) ($4,932) ($33,951)

% +/- -6% -8% 0% -17% -10% -6% -8%


Store #3381 554 E. 8th Street, Holland, MI

Sales: $792,579EBITDA:$31,546(Trailing 12 Mo Thru June 2018)

Located on the corner of Hoover and 8th Street. This single drive thru is approximately 1 mile from Hope College’s football stadium, baseball fields, tennis fields and track. Tulip City Beauty college is next door. Other businesses close by include a Menards, Secretary of State office, Chevrolet dealer and bank.

Nearby competition includes McDonald’s.




Store # 3381 554 E. 8th Street, Holland, MI


2015 $49,508 $51,273 $68,421 $73,277 $72,584 $72,519 $77,604 $68,731 $60,562 $65,167 $58,518 $57,884 $776,048

2016 $47,585 $50,465 $60,536 $67,245 $67,057 $62,650 $69,144 $70,293 $67,033 $64,572 $63,410 $57,935 $747,925

$ +/- ($1,923) ($808) ($7,885) ($6,032) ($5,527) ($9,869) ($8,460) $1,562 $6,471 ($595) $4,892 $51 ($28,123)

% +/- -4% -2% -12% -8% -8% -14% -11% 2% 11% -1% 8% 0% -4%

2016 $47,585 $50,465 $60,536 $67,245 $67,057 $62,650 $69,144 $70,293 $67,033 $64,572 $63,410 $57,935 $747,925

2017 $52,163 $55,956 $66,450 $66,403 $72,773 $74,474 $73,599 $75,714 $70,055 $71,420 $67,488 $60,423 $806,918

$ +/- $4,578 $5,491 $5,914 ($842) $5,716 $11,824 $4,455 $5,421 $3,022 $6,848 $4,078 $2,488 $58,993

% +/- 10% 11% 10% -1% 9% 19% 6% 8% 5% 11% 6% 4% 8%

2017 $52,163 $55,956 $66,450 $66,403 $72,773 $74,474 $73,599 $75,714 $70,055 $71,420 $67,488 $60,423 $806,918

2018 $55,426 $53,633 $63,826 $60,524 $67,275 $73,196 $0 $0 $0 $0 $0 $0 $373,880

$ +/- $3,263 ($2,323) ($2,624) ($5,879) ($5,498) ($1,278) ($14,339)

% +/- 6% -4% -4% -9% -8% -2% -4%

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