What was the pension plan withdrawal liability for Aunt Millies Bakeries in 2023?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
progress | 6,691,112 | 3,102,063 | | Land | 2,446,173 | 2,471,173 | | | 39,539,220 | 38,210,298 | | Notes receivable – distributor routes, less current maturities, net | 4,862,381 | 3,256,368 | | Right of use assets | 20,264,988 | 20,972,254 | | Other assets | 769,267 | 854,588 | | Noncurrent assets held for sale | 25,000 | • 447.070.000 | | Total assets | $ 126,654,714 | $ 117,073,938 |
PERFECTION BAKERIES, INC. CONSOLIDATED BALANCE SHEETS September 30, 2024 and 2023
| LIABILITIES | 2024 | 2023 | ||
|---|---|---|---|---|
| Current liabilities | ||||
| Current maturities of long-term obligations | $ | 1,704,850 | $ | 1,677,001 |
| Subordinated revolving credit facility | 1,973,937 | 2,740,852 | ||
| Current portion of pension plan withdrawal liability | 578,437 | 541,636 | ||
| Accounts payable | 21,890,353 | 24,501,524 | ||
| Accrued expenses | 26,086,770 | 22,040,792 | ||
| Lease liability, current | 4,691,689 | 4,481,275 | ||
| Deferred revenue | 835,063 |
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the company's pension plan withdrawal liability in 2023 was $11,746,895. This figure represents the total long-term obligation Aunt Millies Bakeries had for exiting multiemployer defined benefit pension plans. Additionally, the current portion of the pension plan withdrawal liability, which represents the amount due within the next year, was $541,636 in 2023.
For a prospective franchisee, this information is relevant because it provides insight into the financial obligations of Aunt Millies Bakeries. While franchisees are not directly responsible for these liabilities, the overall financial health of the franchisor can impact the support and resources available to franchisees. A significant pension plan withdrawal liability could potentially strain the franchisor's finances.
It's important to note that these liabilities stem from decisions made by Aunt Millies Bakeries to exit certain pension plans in the past. The company negotiated exits from multiemployer defined benefit pension plans in 2015, 2016, and 2018, resulting in these withdrawal obligations. The amounts recorded represent the present value of the established or estimated payments, with interest rates ranging from 6.5% to 7.5% depending on the specific agreement.
Therefore, while the franchisee is not directly impacted, understanding the franchisor's financial obligations, such as pension plan withdrawal liabilities, is a crucial part of assessing the overall stability and long-term viability of the franchise system. Prospective franchisees should consider this information in conjunction with other financial data provided in the FDD and seek clarification from the franchisor regarding any concerns.