Besides the assets of the Company, what else collateralizes the loan obtained by Dryject?
Dryject Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Note 2 Goodwill The accounting of the purchase of 100% of the membership units in 2016 resulted in the recognition of goodwill of $1,509,159. The Company adopted ASC 350-20-35-63 which allows private companies the option of amortizing goodwill over ten years on a straight-line basis.
- Note 3 Transfer of membership In August 2016, 100% of the ownership of the LLC was transferred to a new member. The purchase was financed with a note from Wilmington Savings Fund Society (Bank), guaranteed by the SBA, for $1,547,800 and a seller financed note of $300,000. The purchase price was $1,500,000 for 100% of the ownership of the LLC
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, a loan obtained to finance the purchase of the company in August 2016 is collateralized not only by the assets of the Company, but also by the assets of DryJect Inc. Acquisition Corporation. The original loan from WSFS Bank was for $1,547,800 and was guaranteed by the SBA. Additionally, there was a seller financed note of $300,000.
The debt and the cost of financing were allocated with 75% to the Company and 25% to DryJect Inc. Acquisition Corporation. The purchase price was $1,500,000 for 100% ownership of the LLC and $500,000 for the assets in DryJect Inc.
Furthermore, the note is guaranteed by the member, meaning that an individual has provided a personal guarantee for the loan. This is a common practice in franchising, especially for smaller or newer franchise systems, as it provides the lender with additional security in case of default.