How was the purchase of the Dryject LLC financed?
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 transfer of 100% ownership of Dryject LLC to a new member in August 2016 was financed through a combination of debt instruments. Specifically, the purchase was facilitated by a note from Wilmington Savings Fund Society (Bank), formerly Bryn Mawr Trust Company, guaranteed by the Small Business Administration (SBA), amounting to $1,547,800. Additionally, a seller-financed note of $300,000 was utilized.
The total purchase price was $1,500,000 for 100% ownership of Dryject LLC and $500,000 for the assets of DryJect Inc. The debt and associated financing costs were allocated between DryJect Management, LLC (75%) and DryJect Inc. Acquisition Corporation (25%). The loan is secured by the assets of both DryJect Management, LLC and DryJect Inc. Acquisition Corporation, and the note is guaranteed by the member.
For a prospective franchisee, this information provides insight into the financial structure of Dryject and how its acquisition was funded. Understanding the debt obligations and the allocation of those debts between Dryject and its related entities can offer a glimpse into the company's financial health and stability. It also highlights the role of SBA guarantees and seller financing in facilitating the ownership transfer, which may be relevant if a franchisee is considering financing options for their own franchise.
It is important to note that the financial details provided pertain to the 2016 acquisition and may not reflect the current financial standing or financing arrangements of Dryject. A prospective franchisee should seek updated financial information and consult with financial advisors to assess the current financial health of the company.