In 2024, what was the total long-term debt for Boulder Designs?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
greements in the amount of $563,824 and $576,824, respectively, consist of franchise rights previously sold by the Company that were repurchased due to various circumstances with the intent to resale. An impairment loss of $28,000, $30,000, and $30,000 was charged to operations during 2024, 2023, and 2022, respectively.
(4) Notes Payable
Notes payable at December 31, 2024 and 2023 includes three notes payable on demand with an aggregate balance of $248,000 and $255,000, respectively. One note bears interest at a rate of 4% and the other two notes do not have a stated interest rate.
(5) Long-Term Debt
Long-term debt at December 31, 2024 and 2023 consists of the following:
| 2024 | 2023 | ||
|---|---|---|---|
| Note payable to a finance company that matures in | |||
| July 2025 with no stated interest rate and monthly | _ | ||
| payments of $1,399; secured by |
Source: Item 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the total long-term debt for the company in 2024 was $585,701. This debt is broken down into several components, including a note payable to a finance company maturing in July 2025 with monthly payments of $1,399, secured by equipment, with a balance of $13,971. There is also a note payable to the Small Business Administration maturing in June 2052, bearing an interest rate of 3.75% with monthly payments of $1,226, secured by equipment, with a balance of $240,000. Additionally, there are notes payable under various terms for the acquisition of franchise rights, due at the time the franchise rights are resold, which do not bear interest, totaling $331,730.
It is important to note that the current installments, amounting to $13,971, are deducted from the total long-term debt to arrive at the "Long-term debt, less current installments" figure of $571,730 for 2024. This indicates the portion of the long-term debt not due within the next year. The aggregate maturities of long-term debt for the five years subsequent to December 31, 2024, are also detailed, providing a schedule of debt repayment obligations.
For a prospective franchisee, understanding the long-term debt obligations of Boulder Designs is crucial as it reflects the financial health and stability of the franchisor. A high level of debt could indicate financial strain, potentially affecting the franchisor's ability to support its franchisees. Conversely, well-managed debt could signify strategic investments and growth. Reviewing the maturity schedule and the nature of the debt (e.g., SBA loan, acquisition-related debt) can provide insights into the franchisor's financial planning and risk management. Franchisees should seek clarification from Boulder Designs regarding the purpose and terms of the debt to fully assess its implications.