What was the interest expense for 1 800 Packouts in the later of the two years presented in this table?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 tax benefit (provision) | | (765,698) | 1,280,676 | | | Net loss | Ś | (13,710,570) | $ (10,438,670) | |
| For the | he ) | ears/ | End | ed D | ecemi | ber | 31. |
|---|---|---|---|---|---|---|---|
| --------- | ------ | ------- | ----- | ------ | ------- | ----- | ----- |
| Revenues | $ | 34,597,657 | $ 26,026,524 |
|---|
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the interest expense for the year ended December 31, 2023, was $5,506,427. The interest expense for the year ended December 31, 2022, was $3,821,499. Therefore, the interest expense in the later of the two years, 2023, was $5,506,427.
Interest expense represents the cost incurred by 1 800 Packouts for its debt financing. This includes expenses like interest payments on loans and amortization of debt issuance costs. Monitoring interest expenses can provide insights into the company's financial leverage and borrowing costs.
For a prospective franchisee, understanding the franchisor's interest expense can be useful in assessing the financial health and stability of the company. A significant increase in interest expense could indicate higher debt levels or rising borrowing costs, which might impact the franchisor's ability to support its franchisees or invest in the brand. Conversely, stable or decreasing interest expenses could suggest sound financial management and a healthy balance sheet.