What fees are the Class A-1 Notes subject to in relation to Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
outstanding principal amount of $125,000 (the "2024-1 Class A-2 Notes"), (ii) 2023-2 8.241% Class A-2 notes with an outstanding principal amount of $237,600 (the "2023-2 Class A-2 Notes"), (iii) 2022-1 7.206% Class A-2 notes with an outstanding principal amount of $347,013 (the "2022-1 Class A-2 Notes"), and (iv) 2017-1 5.093% Class A-2-II notes with an outstanding principal amount of $370,000 (collectively, the "Class A-2 Notes"). The Co-Issuers also have entered into revolving financing facilities of Series 2023-1 Variable Funding Senior Notes, Class A-1 (the "2023-1 Class A-1 Notes") and Series 2022-1 Variable Funding Senior Notes, Class A-1 (the "2022-1 Class A-1 Notes", collectively with the 2023-1 Class A-1 Notes, the "Class A-1 Notes", and collectively with the Class A-2 Notes, the "Senior Notes"). Each of the 2023-1 Class A-1 Notes and the 2022-1 Class A-1 Notes allow for the drawing of up to $200,000 on a revolving basis, for a combined total of up to $400,000.
Interest and principal payments on the Class A-2 Notes are due on a quarterly basis. The requirement to make such quarterly principal payments on the Class A-2 Notes is subject to certain financial conditions set forth in t
Source: Item 23 — Receipts (FDD pages 92–334)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the Class A-1 Notes are subject to specific fees. These notes bear interest at a variable rate that is based on the prime rate, the federal funds rate, the secured overnight financing rate, or the commercial paper rate applicable to conduit investors. The rate used depends on the specific note purchase agreement.
In addition to interest, Moe's Southwest Grill's Class A-1 Notes are subject to commitment fees on any unutilized portion of the investors' commitments. There are also fees associated with any letters of credit issued under these notes. As of December 29, 2024, the outstanding letters of credit under the 2022-1 Class A-1 Notes totaled $24,248, primarily related to interest reserves required under the Indenture.
As of the same date, December 29, 2024, Moe's Southwest Grill had outstanding amounts of $148,000 and $138,000 under the 2022-1 Class A-1 Notes and the 2023-1 Class A-1 Notes, respectively. Interest payments for these notes are due on a quarterly basis. Prospective franchisees should be aware of these financing arrangements, as they reflect the financial obligations of the parent company and could indirectly impact the franchise system's financial health and stability.