New York, October 29, 2012 -- Moody's Investors Service today assigned a B3 rating to Checkers Drive-in Restaurants, Inc.'s (Checkers) proposed $150 million guaranteed senior secured notes. In addition, Moody's assigned Checkers a B3 Corporate Family Rating (CFR) and Probability of Default Rating (PDR). The rating outlook is stable.

RATINGS RATIONALE

Proceeds from the proposed financing will be used to fund a special dividend to shareholders of about $32 million and refinance outstanding debt. Ratings are subject to review of final documentation.

In the event the size of the proposed financing increases from current expectations the ratings on the secured notes as well as the CFR could be negatively impacted.

The ratings and outlook are also subject to the company successfully amending its current $15 million senior secured revolving credit facility on acceptable terms and conditions that in part permit the current transaction, increase commitments to $20 million, and extend the maturity to 2017.

Ratings assigned are:

Corporate Family Rating at B3

Probability of Default Rating at B3

$150 million guaranteed senior secured notes due 2017 at B3 (LGD 3, 48%)

The rating outlook is stable.

The B3 Corporate Family Rating reflects Checkers high leverage and modest coverage, and our concern that the soft consumer spending environment and competition will continue to pressure same store sales, earnings and debt protection metrics. The ratings are supported by the company's material level of brand awareness, reasonable scale, and adequate liquidity.

The stable outlook reflects Moody's view that the company's increased focus on menu innovation, providing value to the consumer, and differentiated product mix should help to further strengthen operating performance over time. These initiatives along with various cost saving plans and expanding different day-parts should also help to further improve leverage at the restaurant level and slowly improve earnings and debt protection metrics. The outlook also expects that management maintain a moderate financial policy and that liquidity remains adequate.

Factors that could result in an upgrade include a sustained improvement in earnings driven by positive operating trends and lower costs. Specifically, an upgrade would require debt to EBITDA approaching 5.25 times and EBITA coverage of interest above 1.75 times on a sustained basis. A higher rating would also require good liquidity.

There could be downward ratings pressure in the event operating performance were to deteriorate resulting in an inability to improve credit metrics over the intermediate term. Specifically, a downgrade could occur if debt to EBITDA exceeded 6.5 times or EBITA to interest was below 1.1 times on a sustained basis. A deterioration in liquidity for any reason could also result in negative ratings pressure.

The principal methodology used in rating Checkers Drive-in Restaurants, Inc was the Global Restaurant Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Checkers Drive-in Restaurants, Inc. owns, operates, and franchises hamburger quick service restaurants under the brand names Checkers and Rally's Hamburgers. Checkers has about 774 restaurants of which 300 are company owned and operated and 474 are franchised. Annual revenues are approximately $300 million although systemwide revenues are about $690 million.

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William V. Fahy VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Kendra M. Smith MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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