What is the maturity date of the loan agreement guaranteed by Batteries Plus Bulbs on behalf of Holdings?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
roximately $350 and $347 for claims incurred but not yet paid at December 31, 2023 and 2022, respectively, has been recorded within accrued expenses within the accompanying consolidated balance sheets. Management believes this liability is sufficient to cover estimated claims including claims incurred but not yet reported.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
December 31, 2023 and 2022 (in thousands)
Guarantees
The Company guarantees a loan agreement on behalf of Holdings. Holdings entered into a new credit agreement on June 27, 2023. The new agreement matures on June 27, 2028.
The new loan agreement is collateralized by substantially all assets of the Company. Holdings' liability for the unpaid loan balances was $228,500 at December 31, 2023. Interest costs incurred during 2023, which related to both of the current and prior agreements, was $27,432. The maximum amount of future debt service payments that could be required to be paid under the guarantee is $258,500 plus interest, which represents the $228,500 remaining balance on the term loan and $30,000 maximum revolving loan commitment. During 2023 and 2022, the Company received $297,050 and $218,075, respectively, from Holdings under the
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Batteries Plus Bulbs FDD, Batteries Plus Bulbs guarantees a loan agreement on behalf of Holdings, its parent company. Holdings entered into a new credit agreement on June 27, 2023. The maturity date for this agreement is June 27, 2028.
This guarantee means that Batteries Plus Bulbs is financially responsible if Holdings defaults on its loan. The loan agreement is collateralized by substantially all of Batteries Plus Bulbs' assets, which could impact a franchisee if the guarantee is enforced. As of December 31, 2023, Holdings' liability for the unpaid loan balances was $228,500.
The maximum amount of future debt service payments that Batteries Plus Bulbs could be required to pay under the guarantee is $258,500 plus interest. This amount represents the $228,500 remaining balance on the term loan and a $30,000 maximum revolving loan commitment. In 2023, Batteries Plus Bulbs received $297,050 from Holdings, of which $283,866 was repaid through distributions to Holdings. The FDD states that no amount has been accrued in the consolidated financial statements for the guarantees, and Batteries Plus Bulbs holds no collateral in respect of the guarantees of their parent company.