What is the weighted average interest rate for the Senior Notes of Chick Fil A?
Chick_Fil_A Franchise · 2025 FDDAnswer from 2025 FDD Document
any elected to unwind our two interest rate swap contracts in exchange for the receipt of a $3,500,000 swap unwind fee. In accordance with ASC 815, the Company derecognized the related hedge assets as of the unwind date and reclassified all amounts previously recorded in accumulated other comprehensive income to interest expense. Transaction fees incurred related to the unwind of our two interest rate swaps were not material.
The following tables reflect the Company's outstanding notes payable as of December 31, 2024 and 2023:
| As of December 31, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Weighted Average Interest Rate | Outstanding | Unamortized Deferred Issuance Costs | Carrying Amount | |||||||
| Senior Notes | 2.03% | $ 2,250,000,000 | $ | 4,291,041 | $ 2,245,708,959 | |||||
| Related Party Note | 4.75% | 639,724,415 | — | 639,724,415 | ||||||
| Term Loan | 6.21% | 185,000,000 | 134,545 | 184,865,455 | ||||||
| Total | $ 3,074,724,415 | $ | 4,425,586 | $ 3,070,298,829 | ||||||
| ------------------------- | -- | -- | -- | |||||||
| ------------------------- | -- | -- | -- |
| Weighted Average | Unamortized Deferred |
|---|
Source: Item 23 — Receipts (FDD pages 103–600)
What This Means (2025 FDD)
According to Chick Fil A's 2025 Franchise Disclosure Document, the company has senior notes with different weighted average interest rates depending on the date. As of December 31, 2024, the weighted average interest rate for the Senior Notes is 2.03%. The outstanding amount for these Senior Notes as of this date was $2,250,000,000, with unamortized deferred issuance costs of $4,291,041 and a carrying amount of $2,245,708,959.
In comparison, the weighted average interest rate for the Senior Notes in a prior period was 1.86%. The outstanding amount was $1,500,000,000, with unamortized deferred issuance costs of $2,158,746 and a carrying amount of $1,497,841,254.
These figures reflect the interest Chick Fil A is obligated to pay on its debt. While this information does not directly impact the financial obligations of a new franchisee, it provides insight into the company's financial management and debt structure. Understanding the financial health of the franchisor can be valuable for prospective franchisees.