What was Cinch I.T.'s long-term debt in 2022?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
tatements in order for them to be comparable with the current year, with no effect on net income or member's equity (deficit).
3. LONG-TERM DEBT
Long-term debt consists of the following at December 31:
2022 2021
Note payable, with interest at 3.75 percent, secured by all assets of the Company, payable in monthly installments of principal and interest of $508, due February 20
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company's long-term debt at the end of 2022 was $98,500. This debt is related to a note payable with a 3.75% interest rate, secured by all of Cinch I.T.'s assets. The note is payable in monthly installments of principal and interest of $508, with the payments originally due to begin in September 2024 and the note maturing in February 2052.
It's important to note that the principal maturities for this debt do not begin until 2028, and only after the accrued interest is repaid. This deferral of principal payments could impact Cinch I.T.'s cash flow management in the coming years.
For a prospective franchisee, this long-term debt held by Cinch I.T. could be a factor in assessing the financial stability of the franchisor. While debt isn't inherently negative, understanding the terms and repayment schedule is crucial. Franchisees may want to inquire about how this debt impacts Cinch I.T.'s ability to support its franchisees and invest in the growth of the franchise system.