What was the amortization of deferred financing costs for 1 800 Packouts in 2023?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
----|--------------------| | Cost of revenues | | 10,001,056 | 5,463,228 | | Gross profit | | 24,596,601 | 20,563,296 | | Operating expenses: | | | | | Selling, general and administrative | | 20,522,378 | 18,837,743 | | Depreciation and amortization | | 11,307,800 | 10,597,574 | | Total operating expenses | _ | 31,830,178 | 29,435,317 | | Loss from operations | | (7,233,577) | (8,872,021) | | Other income (expense): | | | | | Interest expense | | (5,506,427) | (3,821,499) | | Gain on sale of unconsolidated subsidiary | | - | 1,025,637 | | Other income (expense) | | (204,868) | (51,463) | | Total other expense, net | | (5,711,295) | (2,847,325) | | Loss before income taxes | | (12,944,872) | (11,719,346) | | Income
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the amortization of deferred financing costs for the year 2023 was $237,783. This figure is part of the adjustments made to reconcile the net loss to the net cash used in operating activities. Deferred financing costs typically represent expenses incurred when obtaining loans or other forms of financing, and amortizing these costs allows 1 800 Packouts to spread the expense over the life of the loan, reflecting a more accurate picture of their financial performance in each period.
For a prospective 1 800 Packouts franchisee, understanding the amortization of deferred financing costs provides insight into the company's financial management and how it accounts for its debt-related expenses. This specific figure indicates the portion of the initial costs of securing financing that was recognized as an expense in 2023. It's important to note that amortization is a non-cash expense, meaning it doesn't represent an actual outflow of cash during the year but rather an allocation of previously incurred costs.
Reviewing these figures in the context of 1 800 Packouts's overall financial statements can help potential franchisees assess the company's profitability and cash flow dynamics. While amortization of deferred financing costs is a standard accounting practice, significant fluctuations from year to year could warrant further investigation to understand the underlying reasons and potential implications for the company's financial stability. Therefore, a franchisee should consider this value as part of a broader due diligence process, examining trends and comparing them against industry benchmarks to make an informed investment decision.