Who guarantees the note related to the 2016 ownership transfer 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 related to the 2016 transfer of ownership was guaranteed by the member. In August 2016, 100% of the ownership of the LLC was transferred to a new member. This purchase was financed through a note from WSFS Bank, which was guaranteed by the SBA, for $1,547,800, along with a seller-financed note of $300,000. The total purchase price consisted of $1,500,000 for 100% ownership of the LLC and $500,000 for the assets in DryJect Inc.
The debt and associated financing costs were allocated, with 75% assigned to the Company and 25% to DryJect Inc. Acquisition Corporation. The loan itself is secured by the assets of both the Company and DryJect Inc. Acquisition Corporation. In addition to being collateralized by the assets of the company, the note is also guaranteed by the member.
For a prospective franchisee, this indicates that the member of Dryject Management, LLC provided a personal guarantee for the loan used to finance the ownership transfer. This type of guarantee is common in franchise acquisitions, where lenders often require a personal guarantee to mitigate their risk. It is important to note that the Small Business Administration (SBA) also guaranteed a portion of the loan, which may have facilitated the financing process.