If a franchisee obtains financing from Navitas, does Bft have any involvement?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
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, Bft anticipates that if financing opportunities occur, they would be conducted by newly created indirect parents immediately upstream of Assetco, LLC. Bft's and Assetco's only involvement in the financing opportunity would be to guarantee the obligations of these newly created indirect parents involved in the transaction.
This guarantee is expected to increase the leverage ratio of debt to "Adjusted EBITDA" of Xponential and its subsidiaries, including Bft, by an amount that cannot be determined until the details of the financing opportunity are finalized. Adjusted EBITDA is defined as EBITDA (net income/loss before interest, taxes, depreciation, and amortization), adjusted for the impact of certain non-cash and other items not considered in the evaluation of ongoing operating performance.
In practical terms, if a Bft franchisee seeks financing, Bft's parent company might be involved in guaranteeing the loan, which could affect the overall financial health of the parent company and its subsidiaries. However, the exact impact is contingent on the specifics of the financing arrangement, which are not fully detailed in the FDD.