Under what circumstances would Bft be involved in guaranteeing obligations of newly created indirect parents?
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 1 — THE FRANCHISOR, ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 7–12)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, Bft's involvement in guaranteeing obligations of newly created indirect parents is related to potential future funding and financing opportunities for its parent entities. Specifically, Bft anticipates that if a financing opportunity occurs, it would be conducted by newly created indirect parents immediately upstream of Assetco, Bft's direct parent.
In such a scenario, Bft's involvement, along with Assetco's, would be limited to guaranteeing the obligations of these newly created indirect parents who are directly involved in the financing transaction. This guarantee is expected to increase the leverage ratio of debt to "Adjusted EBITDA" of Xponential and its subsidiaries, including Bft.
The exact amount of this increase is not determinable unless and until the specific 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 that Bft does not consider in its evaluation of ongoing operating performance.