What was the total long-term debt for Jersey Mikes at the end of 2024?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
2,990,805 | $ 78,856,112 | | Accrued expenses | 16,532,442 | 8,810,859 | | Total accounts payable and accrued expenses | $ 109,523,247 | $ 87,666,971 |
10. LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 2024 and 2023:
| 2024 | 2023 | |
|---|---|---|
| Series 2019-1 Class A-2 Senior Secured 4.433% Notes | $ 496,250,000 | $ 496,250,000 |
| Series 2021-1 Class A-2-I Senior Secured 2.891% Notes | 248,750,000 | 248,750,000 |
| Series 2021-1A Class A-2-II Senior Secured 2.493% Notes | 248,750,000 | 248,750,000 |
| Series 2024-1 A2 Senior Secured 5.636% Notes | 750 |
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, the total long-term debt for the company at the end of 2024 was $1,743,750,000. This figure is before accounting for the current portion of long-term debt ($15,625,000) and debt issuance costs ($28,809,729). After deducting these amounts, the net total long-term debt is $1,699,315,271.
For a prospective franchisee, understanding the franchisor's debt is crucial as it can indicate the financial stability and capacity of Jersey Mikes to support its franchisees. High debt levels might suggest a higher risk, potentially impacting the franchisor's ability to invest in franchisee support, marketing, or innovation. Conversely, it could also reflect strategic investments in growth and expansion.
It is important to note that the FDD also lists the specific components of this long-term debt, including various series of senior secured notes with different interest rates. These include Series 2019-1 Class A-2 Senior Secured 4.433% Notes, Series 2021-1 Class A-2-I Senior Secured 2.891% Notes, Series 2021-1A Class A-2-II Senior Secured 2.493% Notes, and Series 2024-1 A2 Senior Secured 5.636% Notes. The presence of these notes indicates that Jersey Mike's has utilized securitization transactions to manage its finances.
A potential franchisee should consider these debt figures in the context of Jersey Mike's overall financial health, including revenue, profitability, and cash flow. Comparing these figures to previous years and industry benchmarks can provide a more comprehensive understanding of the franchisor's financial position and associated risks.