How much did 1 800 Packouts borrow on long-term debt in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
terest expense | | (3,821,499) | | (647,029) | | Earnings from unconsolidated subsidiary | | - | | 77,537 | | Gain on sale of unconsolidated subsidiary | | 1,025,637 | | - | | Other income (expense) | _ | (51,463) | | (112,956) | | Total other expense, net | _ | (2,847,325) | | (682,448) | | Loss before income taxes | | (11,719,346) | | (6,523,717) | | Income tax benefit | _ | 1,280,676 | | 374,421 | | Net loss | $ | (10,438,670) | s | (6,149,296) |
| Balance as of April 9, 2021 (inception) | $ | |
|---|---|---|
| Contributions | 47,557,681 | |
| Net loss | (6,149,296) | |
| Balance as of December 31, 2021 | 41,408,385 | |
| Contributions | 35,555,980 | |
| Distributions | (250,000) | |
| Net loss | _ | (10,438,670) |
| Balance as of December 31, 2022 | Ś | 66,275,695 |
| For the year ded December 31, 2022 | (in | r the period from April 9, 2021 ception) through cember 31, 2021 | ||
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net loss | $ | (10,438,670) | $ | (6,149,296) |
| Adjustments to reconcile net loss to net cash used in | ||||
| operating activities: | ||||
| Amortization of goodwill and intangible assets | 10,568,470 | 2,543,033 | ||
| Depreciation of fixed assets | 29,104 | 5,840 | ||
| Amortization of deferred financing costs | 213,726 | 38,998 | ||
| Amortization of operating lease right-of-use asset | 108,253 | - | ||
| Gain on sale of unconsolidated subsidiary Loss on disposal of fixed assets | (1,025,637) 43,615 | - | ||
| Provision for bad debt | 43,615 25,950 | 32,710 | ||
| Decrease (increase) in: | 23,330 | 32,710 | ||
| Accounts receivable | (777,114) | 34,410 | ||
| Contract assets | (2,540,535) | (169,463) | ||
| Other assets | (535,234) | (216,538) | ||
| Increase (decrease) in: | 2 012 105 | 472.450 | ||
| Accounts payable and accrued expenses Contract liabilities | 2,012,196 3,647,786 | 472,458 768.118 | ||
| Operating lease liabilities | (76,533) | 700,110 | ||
| Deferred taxes | (1,269,181) | (409, 393) | ||
| Net cash used in operating activities | _ | (13,804) | (3,049,123) | |
| • | _ | (13,604) | (3,049,123) | |
| Cash flows from investing activities: | (000 774) | (5.040) | ||
| Purchase of property and equipment | (238,771) | (5,840) | ||
| Contingent consideration paid | ||||
| Proceeds from sale of unconsolidated subsidiary | (1,200,000) 1,623,174 | |||
| Net cash paid for acquisitions | (46,109,861) | (62,103,632) | ||
| Net cash used in investing activities | Ξ | (45,925,458) | (62,109,472) | |
| Cash flows from financing activities: | ||||
| Member contributions | 29,025,980 | 40,065,556 | ||
| Borrowing on long-term debt | 20,100,000 | 28,000,000 | ||
| Payment of debt issuance costs | (307,500) | (932,140) | ||
| Repayment of long-term debt | (378,894) | 2.070.502 | ||
| Borrowing on short-term debt | 3,078,592 | |||
| Repayment of short-term debt | (3,000,000) | |||
| Member distributions | (250,000) | (3,000,000) | ||
| Net cash provided by financing activities | 48,189,586 | 67,212,008 | ||
| Net change |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the company borrowed $20,100,000 on long-term debt during the year ended December 31, 2022. This information is derived from the cash flow statement, which details the cash flows from financing activities. This provides insight into how 1 800 Packouts funds its operations and growth.
For a prospective franchisee, understanding the borrowing activities of the franchisor can be crucial. It gives an idea of the financial leverage 1 800 Packouts employs and its reliance on debt financing. A significant increase in borrowing could indicate expansion or acquisitions, but it could also raise concerns about financial stability if not managed properly.
It's important to note that while the FDD specifies the amount borrowed, it does not detail the specific terms of the debt beyond the Deerpath Fund Services, LLC arrangement. A potential franchisee should inquire about the interest rates, repayment schedules, and any covenants associated with this debt to fully assess the financial health and strategy of 1 800 Packouts.