Who guarantees the note used to finance 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 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, the note from WSFS Bank used to finance the transfer of membership in August 2016 was guaranteed by the member. The note, which was for $1,547,800, was used to finance part of the purchase of 100% of the ownership of the LLC. The total purchase price was $1,500,000 for the ownership and $500,000 for the assets in DryJect Inc. The debt and cost of financing were allocated 75% to the Company and 25% to DryJect Inc. Acquisition Corporation. The loan is collateralized by the assets of the Company and DryJect Inc. Acquisition Corporation.
This means that the individual who became the new member of the Dryject LLC in 2016 personally guaranteed the $1,547,800 note from WSFS Bank. This is a significant point for prospective franchisees to understand because it clarifies the financial structure of Dryject's ownership and how the initial purchase was secured.
It is important to note that the note was also guaranteed by the Small Business Administration (SBA). This type of guarantee is not unusual in business acquisitions, as it can provide additional security to the lender and facilitate the financing process. The assets of both DryJect Management, LLC and DryJect Inc. Acquisition Corporation served as collateral for the loan.