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Getty Images

Checkers and Rally's, backed by private equity firm Oak Hill Capital Partners, "hopes" to refinance its debt within a year, conditioned upon stable markets, CEO Frances Allen told Axios.

Why it matters: The beleaguered burger chain is making headway under Allen, who was brought in to turn around the business in early 2020.

By the numbers: Revenue from Jan. 1 through late October of 2021 was $271 million, up 8% compared to the same period a year prior, she said.

  • EBITDA is projected to improve to $60 million by 2025 from just under $40 million currently, Allen added.

What's next: Once Checkers improves its EBITDA by 50%, the company can then talk about an exit.

  • Oak Hill bought the business in 2017 for $525 million and then injected it with extra $20 million in cash about a year ago.

Between the lines: The drive-thru specialist overhauled its kitchens, which allows it to introduce new products such as chicken tenders.

  • The company is also rolling out a new artificial intelligence (AI)-powered voice assistant to take orders, alleviating labor shortages.

Catch up fast: Considered a "top market concern loan" by Fitch Ratings, the credit rating agency lists the company as having nearly $247 million in loans.

  • Moody's Investors Service, which reviewed the restaurant operator's Caa2 corporate rating last March, said a year ago Checkers had $211 million in first- and second-lien term loans.
  • The rating agency also noted at the time the company incurred a limited default by converting a $52 million second-lien loan into series C payment-in-kind (PIK) preferred equity.

The other side: Allen described the debt as "old baggage" and "old news" and as something she plans to "readdress."

  • She pointed out that price wars instigated by McDonald's and then Burger King in 2017 caused EBITDA to "go backwards," and it's how the burger flipper ended up on distressed watchlists.

Of note: The chain's fries have been voted best in the business three times since 2017, Allen claimed.

The bottom line: While many restaurant chains were negatively impacted by the pandemic, Checkers had already perfected contactless food service over the past 37 years via its double drive-thrus.

Go deeper

Jan 13, 2022 - Politics & Policy

First look: NRCC raised $140 million in 2021

House Majority Leader Kevin McCarthy. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

The House Republicans' campaign arm raised $140 million in 2021, and $17.9 million in December alone, setting a new record for the committee's off-year fundraising, Axios has learned.

Why it matters: The hefty cash infusion into the National Republican Campaign Committee comes as House Republican leaders are ramping up their efforts to take back the chamber's majority in November. The party plans to focus its messaging on inflation, immigration, crime and pandemic closures.

Thousands without power as "hazardous" winter storm lashes East Coast

Winter view from Charlotte as winter storm Izzy creates dangerous conditions in Charlotte, N.C. on Jan. 16. Photo: Peter Zay/Anadolu Agency via Getty Images

A major winter storm was lashing much of the East Coast on Sunday, causing widespread power outages and disrupting travel over the holiday weekend.

The big picture: Heavy snow and ice accumulations are "likely to produce hazardous travel," downed trees and more power outages from the Mid-South to the Northeast, per the National Weather Service. Some parts of the U.S. can expect to see up to a foot of snow through Monday.

Updated 1 hour ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.