What was the outstanding balance of the $8,000,000 term loan for Aunt Millies Bakeries in 2023?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
7,700,000. The subordinated revolving credit facility does not have a maturity date and is therefore presented as current on the consolidated balance sheets. The subordinated revolving credit facility bears interest at 5.00% to 6.00%. Borrowings on the subordinated revolving credit facility were $1,973,937 and $2,740,852 as of September 30, 2024 and 2023, respectively.
NOTE 5 - DEBT ARRANGEMENTS (Continued)
The table below reflects the Company's long-term debt at September 30, 2024 and 2023:
| 2024 | 2023 | ||
|---|---|---|---|
| $441,475 promissory note, payable in monthly installments of $8,535 beginning November 1, 2022 through September 30, 2027. The interest rate at September 30, 2023 was 6.00%. | $ 280,552 | $ | 363,421 |
| $8,000,000 term loan, payable in monthly installments of $95,238 beginning June 1, 2021 through April 30, 2027. The effective interest rate at September 30, 2023 was 5.67%. | 2,714,286 | 5,333,333 | |
| $318,587 term loan, payable in monthly installments |
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the $8,000,000 term loan had an outstanding balance of $5,333,333 as of September 30, 2023. This loan was payable in monthly installments of $95,238 beginning June 1, 2021, with an effective interest rate of 5.67% at September 30, 2023. The loan's initial maturity date was set for March 31, 2025.
This information is relevant to potential franchisees as it provides insight into the financial obligations of Aunt Millies Bakeries. Understanding the company's debt structure can help franchisees assess the financial stability and overall health of the franchisor. The term loan was later amended in May 2024, extending the maturity date to April 2027, which indicates ongoing management of the company's debt.
Prospective franchisees should consider the implications of Aunt Millies Bakeries's debt when evaluating the franchise opportunity. While debt is a normal part of business operations, it's important to understand how it might affect the franchisor's ability to support franchisees, invest in the brand, and navigate economic challenges. Further investigation into the terms of the loan and the company's overall financial strategy is advisable for any potential franchisee.