What collateral secures the loan for the purchase of 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 WSFS 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 an
Source: Item 8 — BUSINESS RELATIONSHIP (FDD pages 68–229)
What This Means (2025 FDD)
According to Dryject's 2025 Franchise Disclosure Document, the loan used to finance the transfer of 100% membership in August 2016 is collateralized by the assets of the Company and DryJect Inc. Acquisition Corporation. The original purchase was financed with a note from WSFS Bank, guaranteed by the SBA, for $1,547,800 and a seller financed note of $300,000. The purchase price included $1,500,000 for 100% ownership of the LLC and $500,000 for the assets in DryJect Inc. The debt and financing costs are allocated with 75% to the Company and 25% to DryJect Inc. Acquisition Corporation.
This means that the bank holds a security interest in the assets of both the Dryject company itself and DryJect Inc. Acquisition Corporation until the loan is repaid. In the event of default, the bank can seize these assets to recover the outstanding debt. Additionally, the note is guaranteed by the member, adding another layer of security for the lender.
For a prospective Dryject franchisee, this information provides insight into the financial structure of the company and the security required by lenders. While this specific loan relates to a past transaction, it demonstrates the type of collateral that may be required for financing related to the Dryject business. It is important to note that the specifics of any financing obtained by a new franchisee may differ based on their individual circumstances and the lending institution involved.