What was the total Change in Fair Value of Interest Rate Swap for Gold Star?
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 is detailed in the provided balance sheets. The total fair value of the interest rate swap is $308,433, which is the sum of Gold Star Chili, Inc. at $194,930 and GSC Properties, LLC at $113,503.
This figure represents the estimated market value of an agreement to exchange interest rate payments. For Gold Star, this swap likely involves exchanging a variable interest rate for a fixed rate, or vice versa, to manage interest rate risk on its borrowings. The fair value reflects the current economic advantage or disadvantage to Gold Star based on prevailing interest rates and the terms of the swap agreement.
Prospective franchisees should understand that these types of financial instruments are typically managed at the corporate level and are unlikely to directly impact the operations of an individual franchise. However, the overall financial health and risk management strategies of Gold Star could indirectly affect franchisees. It is advisable for potential franchisees to inquire about Gold Star's risk management policies and how they might influence the stability of the franchise system.