What was the amount of Carvel's restricted cash - securitization as of December 29, 2024?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
l as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Atlanta, Georgia March 21, 2025
Consolidated balance sheets
| December 29, 2024 | |||
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 620 | $ | 403 |
| Restricted cash - securitization | 5,725 | 7,052 | |
| Accounts receivable, net of allowance for credit losses of | |||
| $1,695 and $1,136 in 2024 and 2023, respectively | 33,548 | 26,793 | |
| Prepaid expenses and other current assets | 5 | 5 | |
| Total current assets | 39,898 | 34,253 | |
| Assets held for lease, net | 261 | 362 | |
| Intangible assets, net | 306,188 | 306,299 | |
| Total assets | $ 346,347 | $ | 340,914 |
| Liabilities and Member's Equity | |||
| Current liabilities: | |||
| Accrued expenses and other liabilities | $ 4,186 | $ | 3,517 |
| Current portion of deferred revenue | 3,346 | 2,827 | |
| Intercompany payables | 3,011 | 4,827 | |
| Total current liabilities | 10,543 | 11,171 | |
| Long-term deferred revenue | 50,042 | 46,288 | |
| Long-term other liabilities | 124 | 125 | |
| Total liabilities | 60,709 | 57,584 | |
| Commitments and contingencies (see Note 7) |
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, as of December 29, 2024, the company had $5,725 in restricted cash related to securitization. This figure represents funds specifically earmarked for franchising or licensing activities that are held in special-purpose, bankruptcy-remote subsidiaries. In comparison, the restricted cash - securitization as of December 31, 2023 was $7,052.
Restricted cash typically cannot be used for the company's general operating expenses or other liabilities. It is important for a prospective franchisee to understand the purpose and limitations of these funds, as they reflect the financial structure and obligations of the Carvel franchise system. The existence of restricted cash indicates that Carvel uses securitization as part of its financing strategy, which may involve specific agreements and obligations related to revenue streams from franchise operations.
Understanding the levels and changes in restricted cash can provide insights into Carvel's financial management and its compliance with securitization agreements. A potential franchisee should inquire about the details of these agreements and how they might affect the franchisor's ability to support franchisees or invest in the brand. Reviewing the notes to the financial statements in the FDD, particularly Note 5, which discusses long-term debt and senior notes, can provide further clarity on the securitization process and its implications for Carvel's financial health.
It is also worth noting that the FDD includes a separate table with different figures for "Restricted cash and cash equivalents - securitization", reporting $32,747 as of December 29, 2024. This discrepancy highlights the importance of clarifying with the franchisor the exact nature and categorization of these restricted funds to gain a comprehensive understanding of Carvel's financial position.