What was the total amount of Carvel's long-term debt as of December 31, 2023?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
1,748 and $1,143 in 2024 and 2023, respectively | | 44,272 | 37,049 | | Inventories | | 1,128 | 978 | | Prepaid expenses and other current assets | | 12,118 | 9,263 | | Advertising funds assets | | 9,927 | 7,643 | | Intercompany receivables from Parent | | 3,277 | 3,277 | | Total current assets | | 115,063 | 110,454 | | Property, equipment, leasehold improvements and land, net | | 71,417 | 71,199 | | Operating lease assets, net | | 62,676 | 69,535 | | Goodwill | | 122,714 | 122,714 | | Intangible assets, net | | 496,479 | 495,389 | | Long-term other assets | | 13,986 | 13,305 | | Total assets | $ | 882,335 | $ 882,596 |
Consolidated balance sheets (cont'd)
| December 29, 2024 | December 31, 2023 | |
|---|---|---|
| Liabilities and Member's Deficit | ||
| Current liabilities: | ||
| Accounts payable | $ 5,320 | $ 8,395 |
| Accrued expenses and other liabilities | 81,587 | 75,840 |
| Income taxes payable | 3,851 | 7,620 |
| Advertising funds liabilities | 8,418 | 8,942 |
| Current portion of deferred revenue | 3,688 | 3,149 |
| Current portion of operating lease liabilities |
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the company's total long-term debt as of December 31, 2023, was $1,258,205. This figure is a component of Carvel's overall liabilities, which totaled $1,578,777 on the same date. It's important to note that this long-term debt excludes the current portion of long-term debt, which was reported separately.
For a prospective Carvel franchisee, understanding the franchisor's debt is crucial. A high level of debt could indicate financial instability, which might affect Carvel's ability to support its franchisees or invest in the brand. It is important to note that the long-term debt is related to senior secured notes issued by GoTo Foods Funding LLC and Jamba Juice Funding LLC, indirect subsidiaries of GTFL. These notes are secured by the intellectual property and franchising-related assets held by Carvel's parent company and affiliates.
Furthermore, the FDD mentions refinancing transactions that occurred during the fiscal year ended December 31, 2023, where new notes were issued to repay older ones. This activity resulted in a loss on early extinguishment of debt amounting to $4,095. Additionally, debt issuance costs of $5,642 were recorded as a reduction of long-term debt for the year ended December 31, 2023. These costs are being amortized to interest expense over the anticipated repayment period.
Prospective franchisees should carefully review Carvel's financial statements and related notes in the FDD, particularly Item 23, to assess the implications of this debt on the franchisor's financial health and stability. Consulting with a financial advisor is recommended to fully understand the risks and opportunities associated with investing in a Carvel franchise, considering the franchisor's debt obligations and financial management practices.