If a franchisee obtains financing from Amerifund, does Bft have any involvement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
As part of the Reorganization, our direct parent, XPOF Assetco, LLC ("Assetco"), was created. As described in Item 21 of this Disclosure Document, Assetco guarantees our obligations as franchisor. Assetco's current direct parent is Xponential Fitness, LLC ("Xponential"). Xponential, via an intermediate holding company, is controlled by Xponential Fitness, Inc. ("XFI"), which is a publicly traded company listed on the New York Stock Exchange under the symbol "XPOF." We anticipate that, if a Financing Opportunity occurs, it would be conducted by newly created indirect parents (immediately upstream of Assetco) and that our and Assetco's only involvement in the Financing Opportunity would be to guarantee the obligations of our newly created indirect parents who are involved in the transaction. We expect that guarantee would cause the leverage ratio of debt to "Adjusted EBITDA" of Xponential and its subsidiaries (including us) to increase in an amount not determinable unless and until the details of the Financing Opportunity are determined. "Adjusted EBITDA" means EBITDA (net income/loss before
interest, taxes, depreciation and amortization), adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance.
Source: Item 10 — FINANCING (FDD page 37)
What This Means (2025 FDD)
Based on the 2025 FDD, the document does not specify whether Bft has any involvement if a franchisee obtains financing from Amerifund. The FDD does outline potential future funding and financing opportunities for Bft's parent entities. In such cases, Bft and its direct parent, XPOF Assetco, LLC, may guarantee the obligations of newly created indirect parents involved in the financing transaction. This guarantee could potentially increase the leverage ratio of debt to Adjusted EBITDA for Xponential and its subsidiaries, including Bft. However, the exact impact would depend on the specific details of the financing opportunity, which are not predetermined.
Because the FDD does not address the specific scenario of a franchisee obtaining financing from Amerifund, it is important for a prospective franchisee to seek clarification from Bft regarding any preferred or approved lenders and whether Bft has any existing relationships or agreements with financing institutions like Amerifund. Understanding the terms and conditions of any financing options is crucial for making an informed decision about investing in a Bft franchise.
To gain a comprehensive understanding of financing options and Bft's involvement, a prospective franchisee should directly inquire with the franchisor about their policies and procedures related to franchisee financing, including any potential benefits or risks associated with specific lenders. This information is essential for assessing the financial viability and overall suitability of the franchise opportunity.