What are the anniversary dates for the notes mentioned in the Capriottis Sandwich Shop FDD?
Capriottis_Sandwich_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
On the seven-year anniversary of the note, a balloon payment is due in an amount sufficient to pay off the outstanding principal.
Beginning in the fifth year after issuance, the lender is also entitled to an additional 25% of the borrower's EBITDA as payment of the outstanding principal until such time as the lender recovers 50% of the original loan proceeds.
On the ten-year anniversary of the note, a balloon payment is due in an amount sufficient to pay the outstanding principal down to 50% of the original note proceeds.
The remaining 50% of the note proceeds is due on the 15-year anniversary of the note, and the anniversary date is June 2038.
- (E) On December 28, 2020, Wing Zone Holdings, LLC entered into an agreement with a minority owner for a subordinated promissory note in the amount of $1,000,000, which shall be due and payable on the earlier of the fifth anniversary of the date of the agreement or the consummation of a change in ownership.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 73)
What This Means (2025 FDD)
According to the 2025 Capriottis Sandwich Shop FDD, several notes have anniversary dates that impact repayment schedules. For notes related to business loan agreements from 2024, a balloon payment is due on the seven-year anniversary of the note issuance to cover any outstanding principal.
For financing transactions that Wing Zone Craig, LLC entered into, beginning in the fifth year after issuance, the lender receives an additional 25% of the borrower's EBITDA until 50% of the original loan is recovered. On the ten-year anniversary of these notes, a balloon payment is due to reduce the outstanding principal to 50% of the original amount. The remaining 50% of the note is due on the 15-year anniversary, specifically noted as June 2038.
Additionally, a subordinated promissory note from December 28, 2020, has a due date on the earlier of the fifth anniversary of the agreement or when a change in ownership occurs. These different anniversary dates and conditions highlight the varied financing arrangements Capriottis Sandwich Shop and its subsidiaries utilize, each with its own repayment terms and potential implications for franchisees.