In 2019, what was the total cash Aunt Millies Bakeries received from the sale and leaseback transaction?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
actions will not materially affect the financial position, results of operations or liquidity of the Company.
NOTE 10 - CUSTOMER CONCENTRATION
Three customers accounted for 55% of the Company's net sales of the year ended September 30, 2024 and 60% of total trade receivables as of September 30, 2024. Two customer accounted for 43% of the Company's net sales for the year ended September 30, 2023 and 52% of total trade receivables as of September 30, 2023.
NOTE 11 - SALE LEASEBACK TRANSACTIONS
During 2019, the Company entered into a sale and leaseback transaction with an external party. The Company sold land and buildings in exchange for cash totaling $11,000,000, with net proceeds approximating $10,800,000 after closing costs, and leases the property back. T
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, in 2019, the company engaged in a sale and leaseback transaction where they sold land and buildings. In exchange for these assets, Aunt Millies Bakeries received $11,000,000 in cash. After deducting closing costs, the net proceeds from this transaction totaled approximately $10,800,000.
As part of the agreement, Aunt Millies Bakeries leased the property back for a term of 10 years. The monthly lease cost was approximately $91,804 until October 2020, after which it increased to $102,664 through May 2029. The responsibility for all maintenance, insurance, and taxes on the property fell to the lessee, which in this case is Aunt Millies Bakeries.
The sale and leaseback transaction resulted in a net gain of approximately $1,154,000 for Aunt Millies Bakeries. This gain was included in other liabilities and is being amortized over the life of the corresponding lease. This type of financial arrangement can allow a company to free up capital tied to real estate while still retaining the use of the property for business operations.