What are the key assets and liabilities reported on the Dryer Vent Squad balance sheet?
Dryer_Vent_Squad Franchise · 2024 FDDAnswer from 2024 FDD Document
On March 15, 2024, the Company acquired certain assets of Dryer vent Squad Franchising, LLC. The primary reason for the acquisition was to acquire the rights to market, sell, and support Dryer Vent Squad franchises that provide Dryer vent services.
As of the date the balance sheet was available to be issued, the assets and future royalties value determined to be in excess of $1,000,000.
The Borrower agrees to provide their Dryer Vent Squad Business franchise rights, the purpose for which this loan was issued, and all related business assets including but not limited to office equipment, lease, phone numbers and customer base, referred to as the "Security", which shall transfer to the possession and ownership of the Lender IMMEDIATELY if this Note should be in default. The Security may not be sold or transferred without the Lender's consent during the course of this Note. If the Borrower breaches this provision, Lender may declare all sums due under this Note immediately due and payable, unless prohibited by applicable law.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 50–51)
What This Means (2024 FDD)
Based on the 2024 Dryer Vent Squad FDD, DVS Holdings, Inc. acquired certain assets of Dryer Vent Squad Franchising, LLC on March 15, 2024. The primary reason for the acquisition was to acquire the rights to market, sell, and support Dryer Vent Squad franchises that provide Dryer vent services. As of the date the balance sheet was available to be issued, the assets and future royalties value determined to be in excess of $1,000,000.
Additionally, if a Dryer Vent Squad franchisee defaults on their loan, the Dryer Vent Squad Business franchise rights, all related business assets including but not limited to office equipment, lease, phone numbers and customer base, referred to as the "Security", shall transfer to the possession and ownership of the Lender IMMEDIATELY. The Security may not be sold or transferred without the Lender's consent during the course of this Note. If the Borrower breaches this provision, Lender may declare all sums due under this Note immediately due and payable, unless prohibited by applicable law.
This means that a significant portion of Dryer Vent Squad's assets are tied to the franchise rights and related business assets. For a prospective franchisee, this highlights the importance of understanding the terms of the franchise agreement and loan agreements, as these assets could be at risk in the event of default. The valuation of assets and future royalties exceeding $1,000,000 also suggests a substantial investment in the Dryer Vent Squad brand and system.