What was the total value of the line of credit for Management Recruiters as of December 31, 2022?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
| Total assets at fair value | $ 55,358 | $ 1,342 | $ | 54,016 | $ | - |
|---|---|---|---|---|---|---|
| Term loan payable | $ 646 | $ - | $ | 646 | $ | - |
| Line of credit | 14,119 | - | 14,119 | - | ||
| Total liabilities at fair value | $ 14,765 | $ - | $ | 14,765 | $ | - |
| December 31, 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Total | Level 1 | Level 2 | Level 3 | ||||
| Cash | $ 3,049 | $ | 3,049 | $ | - | $ | - |
| Notes receivable | 3,492 | - | 3,492 | - | |||
| Accounts receivable | 45,728 | - | 45,728 | - | |||
| Total assets |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the company had a line of credit totaling $12,543 as of December 31, 2022. This figure represents the amount Management Recruiters had drawn from its available credit line at that specific point in time. The line of credit is part of the company's liabilities, reflecting its debt obligations.
For a prospective franchisee, this information provides insight into the financial structure of Management Recruiters. It's important to note that while the company has a line of credit, the existence of such a credit line is not inherently negative. Many established companies utilize credit lines for operational flexibility and strategic investments. However, franchisees may want to further investigate the terms of the credit line, such as interest rates and any associated covenants, to fully understand the financial obligations of Management Recruiters.
Furthermore, the FDD indicates that approximately $10.7 million of availability under the line of credit was utilized by outstanding letters of credit that secure Management Recruiters' obligations to their workers' compensation insurance carrier, and $500 thousand was utilized by a letter of credit that secures their paycard funding account. This leaves approximately $24.8 million available under the agreement for potential borrowings. Additionally, $100 thousand is reserved for Bank Products. The agreement replaces their prior $30 million line of credit. Understanding how Management Recruiters manages its debt and utilizes its credit facilities can help potential franchisees assess the financial stability and risk profile of the franchisor.