Does Aunt Millies Bakeries have subordinated debt through stockholders?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 14 - RELATED PARTY TRANSACTIONS
The Company has subordinated debt through stockholders and has various leases with related parties. Refer to Note 5 and Note 6 for further information of the related party debt and lease transactions, respectively.
NOTE 15 - STOCKHOLDERS' EQUITY
Changes in stockholders' equity for the years ended September 30, 2024 and 2023 is as follows:
The Company also has a subordinated revolving credit facility from stockholders up to a maximum of approximately $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.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries' 2025 Franchise Disclosure Document, the company has subordinated debt through its stockholders. Note 14 in Item 23 regarding related party transactions indicates that the company also has various leases with related parties. Further details on the related party debt and lease transactions can be found in Note 5 and Note 6, respectively.
Additionally, Aunt Millies Bakeries has a subordinated revolving credit facility from stockholders, with a maximum of approximately $7,700,000. As of September 30, 2024, borrowings on this facility were $1,973,937, and as of September 30, 2023, they were $2,740,852. The credit facility does not have a maturity date and is presented as current on the consolidated balance sheets. The interest rate on this facility ranges from 5.00% to 6.00%.
For a prospective franchisee, this information is relevant because it provides insight into the financial structure and related-party transactions of Aunt Millies Bakeries. Understanding the company's debt arrangements, especially those involving stockholders, can help a franchisee assess the financial stability and potential risks associated with investing in the franchise. It is common for franchisors to have debt, but the terms and sources of that debt can vary widely and impact the overall financial health of the company.