What is the fair value of the interest rate swap for Gold Star Properties, LLC?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Gold Star Chili, Inc. | Properties, LLC | TCWW, LLC | Eliminations | _ | Total | ||
|---|---|---|---|---|---|---|---|
| Current Assets | |||||||
| Cash | $ | 437,267 | $ 909,375 | $ 244,320 | $ - | $ | 1,590,962 |
| Accounts Receivable, Less Allowance for | ,, | ||||||
| Expected Credit Losses of $896,732 | 905,238 | 2,002,485 | 4,130 | (1,981,263) | 930,590 | ||
| Advance - Related Party | 3,441,832 | - | - | (3,441,832) | - | ||
| Other Receivables | 21,704 | - | 1,502 | - | 23,206 | ||
| Inventory | 980,151 | - | 27,923 | - | 1,008,074 | ||
| Prepaid Expenses | 166,348 | 109,041 | 15,154 | (12,824) | _ | 277,719 | |
| Total Current Assets | 5,952,540 | 3,020,901 | 293,029 | (5,435,919) | _ | 3,830,551 | |
| Property and Equipment | |||||||
| Land | - | 7,004,518 | - | (164,029) | 6,840,489 | ||
| Buildings | 4,127,417 | 10,257,116 | - | 817,551 | 15,202,084 | ||
| Leasehold Improvements | 5,500,864 | - | 429,641 | - | 5,930,505 | ||
| Furniture and Equipment | 5,913,212 | 184,794 | 535,932 | - | 6,633,938 | ||
| Vehicles | 100,623 | - | - | - | 100,623 | ||
| Construction in Progress | _ | 489,000 | - | - | . - | _ | 489,000 |
| 1 | 6,131,116 | 17,446,428 | 965,573 | 653,522 | 35,196,639 | ||
| Less Accumulated Depreciation | 9,164,879 | 6,837,663 | 291,152 | 727,229 | _ | 17,020,923 | |
| Total Property and Equipment | 6,966,237 | 10,608,765 | 674,421 | (73,707) | _ | 18,175,716 | |
| Fair Value of Interest Rate Swap | 194,930 | 113,503 | - | . - | _ | 308,433 |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the fair value of the interest rate swap for GSC Properties, LLC is $113,503. The fair value of the interest rate swap for Gold Star Chili, Inc. is $194,930. The total fair value of the interest rate swap is $308,433.
An interest rate swap is a financial derivative instrument where one stream of future interest payments is exchanged for another, based on a specified principal amount. Fair value represents the estimated current worth of this swap, considering factors like prevailing interest rates and the swap's terms. For Gold Star, this figure reflects the financial position of their interest rate hedging activities.
For a prospective franchisee, understanding these values is crucial as it provides insight into Gold Star's financial strategies and risk management practices. While franchisees may not directly engage in these types of financial instruments, the overall financial health and stability of the parent company, as reflected in these values, can impact the support and resources available to franchisees. It is important to note that these values are as of a specific date (likely the end of the fiscal year) and can fluctuate over time due to market conditions.