Who guarantees the note 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 note from WSFS Bank for $1,547,800, used to finance the transfer of 100% ownership of the LLC in August 2016, is guaranteed by the member. This note, along with a seller-financed note of $300,000, funded the purchase price of $1,500,000 for the LLC ownership and $500,000 for DryJect Inc.'s assets. The SBA also guaranteed the note from WSFS Bank.
This means that the member of the LLC has provided a personal guarantee for the loan, making them personally liable if the company defaults on its payments. This is a common practice in business acquisitions, as it provides the lender with additional security. The debt and financing costs are allocated with 75% to the Company and 25% to DryJect Inc. Acquisition Corporation. The loan is collateralized by the assets of both the Company and DryJect Inc. Acquisition Corporation.
For a prospective Dryject franchisee, this information is relevant as it provides insight into the financial structure and obligations of the company. While this specific debt relates to a past acquisition, it demonstrates the company's approach to financing and the level of commitment from its member. Understanding the financial health and obligations of the franchisor is crucial for any potential franchisee.