Financing

Checkers gets a $20M cash injection

The drive-thru chain, which was struggling before the pandemic, has seen sales surge and received new funding from Oak Hill Capital to further growth.
Checkers cash influx
Photograph courtesy of Checkers

Checkers Drive-In Restaurants, which a year ago was considered a candidate for bankruptcy, now goes into 2021 with a $20 million cash injection from its private equity owner and new growth initiatives.

The Tampa, Fla.-based drive-thru concept on Monday said that Oak Hill Capital Partners provided the cash to fuel the company’s growth this year—following a 2020 in which the chain generated “high single digit same-store sales growth” while amending its debt.

“Checkers has demonstrated strong performance … despite the significant challenges brought by the events of 2020,” Peter Armstrong, principal at Oak Hill, said in a statement. He noted that Checkers’ sales performance continued into this year.

“We have great confidence in the Checkers management team, and we are pleased to support them in their plans for the future.”

Few chains saw their fortunes turn around during the pandemic quite like Checkers, which operates 836 locations under the Checker’s and Rally’s names. As a drive-thru concept, a customer base clamoring for takeout was right in its wheelhouse.

Before the pandemic, Fitch Ratings listed Checkers among companies most likely to declare bankruptcy and Moody’s in 2019 downgraded its credit rating, citing its heavy debt load.

Checkers’ sales results improved its fortunes. And the company said last year that it was looking to restructure its debt and get additional investment funds to fuel an “aggressive growth agenda.” At the time, the chain said its second quarter same-store sales rose 9%.

The company said on Monday that it approved 40 new franchisees last year and has 72 new locations in its development pipeline. Checkers on Monday promised to reveal more information about its growth strategy during the ICR Conference laster this week.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Financing

Despite their complaints, customers keep flocking to Chipotle

The Bottom Line: The chain continued to be a juggernaut last quarter, with strong sales and traffic growth, despite frequent social media complaints about shrinkflation or other challenges.

Operations

Hitting resistance elsewhere, ghost kitchens and virtual concepts find a happy home in family dining

Reality Check: Old-guard chains are finding the alternative operations to be persistently effective side hustles.

Financing

The Tijuana Flats bankruptcy highlights the dangers of menu miscues

The Bottom Line: The fast-casual chain’s problems following new menu debuts in 2021 and 2022 show that adding new items isn’t always the right idea.

Trending

More from our partners