When is the balloon payment due on the consolidated note payable for Gold Star?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company had seven notes that were all consolidated into one note payable in 2020 with a bank that has a balloon payment due in March 2027. In August 2023, the note was refinanced and extended to August 2028. The note bears interest at Term Secured Overnight Financing Rate (SOFR) plus 2.35% (the Term SOFR was 4.49% at December 31, 2024). The note payable is subject to certain financial covenants, all of which were met or waived at December 31, 2024. The note is collateralized by property and, where applicable, an assignment of rents.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company had seven notes consolidated into one note payable in 2020 with a bank. This consolidated note has a balloon payment due in March 2027. However, in August 2023, Gold Star refinanced the note and extended the due date to August 2028. The note's interest rate is based on the Term Secured Overnight Financing Rate (SOFR) plus 2.35%, with the Term SOFR being 4.49% as of December 31, 2024.
This information is relevant for prospective franchisees as it provides insight into Gold Star's debt management and financial obligations. Understanding the terms of the company's notes payable, including the balloon payment due date and interest rate, can help franchisees assess the financial stability of the franchisor.
The note payable is subject to certain financial covenants, which were either met or waived as of December 31, 2024, indicating that Gold Star was in compliance with its debt obligations at that time. The note is collateralized by property and, where applicable, an assignment of rents, which means the lender has a security interest in these assets. Franchisees should consider these factors when evaluating the overall financial health and risk associated with investing in a Gold Star franchise.
It's important for potential franchisees to review the complete financial statements and consult with a financial advisor to fully understand the implications of Gold Star's debt structure and financial performance. While the FDD provides some details, a comprehensive analysis is necessary to make an informed investment decision.