Checkers receives a $20 million injection

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Photo courtesy of Checkers

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

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

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

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

Few chains have seen their fortunes change during the pandemic quite like Checkers, which operates 836 locations under the Checker’s and Rally’s names. As a drive-thru concept, a clientele demanding take-out was right in its wheelhouse.

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

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

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

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