What was the total amount of long-term debt for Auntie Annes as of December 25, 2022?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Atlanta, Georgia March 11, 2024
Consolidated balance sheets
(In thousands)
| December 31, 2023 | December 25, 2022 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 22,662 | $ 31,196 |
| Restricted cash and cash equivalents - securitization | 29,582 | 27,456 |
| Accounts receivable, net of allowance for credit losses of | ||
| $1,143 and $1,383 in 2023 and 2022, respectively | 37,049 | 31,935 |
| Inventories | 978 | 1,116 |
| Prepaid expenses and other current assets | 9,263 | 8,720 |
| Advertising funds assets | 7,643 | 6,972 |
| Intercompany receivables from Parent | 3,277 | 3,277 |
| Total current assets | 110,454 | 110,672 |
| Property, equipment, leasehold improvements and land, net | 71,199 | 59,734 |
| Operating lease assets, net | 69,535 | 75,786 |
| Goodwill |
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Annes's 2024 Franchise Disclosure Document, the company's total long-term debt as of December 25, 2022, was $1,151,023. This figure is a component of the company's overall liabilities, which also include current liabilities, long-term operating lease liabilities, long-term deferred tax liabilities, long-term deferred revenue, and long-term other liabilities. The total liabilities for Auntie Annes as of that date amounted to $1,481,723.
For a prospective franchisee, understanding the franchisor's debt level is crucial. A high level of debt could indicate financial instability, which might affect the franchisor's ability to support its franchisees. It is important to note that Auntie Annes has senior secured notes under a securitized financing facility. These notes consist of fixed-rate and variable funding series, which could impact the company's financial flexibility depending on market conditions and interest rates.
Furthermore, the FDD mentions a refinancing transaction completed on July 1, 2022, where the Co-Issuers issued new notes to repay previous debts and fund a distribution to shareholders. This type of financial activity can have both positive and negative implications. While refinancing can improve debt terms, it can also result in additional expenses and potential losses, as seen with the recorded loss on early extinguishment of debt of $5,940 for the year ended December 25, 2022.
Therefore, a potential franchisee should carefully evaluate Auntie Annes's financial statements, paying close attention to the details of their debt structure, refinancing activities, and overall liabilities. Consulting with a financial advisor to interpret these figures in the context of the franchise agreement and market conditions is highly recommended.