What was the amount of interest paid by Mrcool?
Mrcool Franchise · 2025 FDDAnswer from 2025 FDD Document
| Gross profit | 100,802 | 0 |
|---|---|---|
| Operating expenses | ||
| Dues and subscriptions | 924 | 1,186 |
| Insurance | 1,080 | 98 |
| Advertising | 28,730 | 779 |
| Tax expense | 1,440 | 3,813 |
| Professional fees | 13,139 | 9,622 |
| Management fee (note H) | 70,792 | 0 |
| Computer supplies | 80,674 | 1,697 |
| Travel | 44,701 | 447 |
| Rent | ||
| 318 | 0 | |
| Freight and shipping | 52,184 | 0 |
| Total operating expenses | 293,982 | 17,642 |
| Operating loss | (193,180) | (17,642) |
| Other income (expense): | ||
| Interest income | 73 | 0 |
| Bank fees | (243) | (90) |
| Inter |
Source: Item 23 — RECEIPTS (FDD pages 55–263)
What This Means (2025 FDD)
According to Mrcool's 2025 Franchise Disclosure Document, the company accrued $0 of interest during the year ending December 31, 2024, and $870 of interest during the year ending December 31, 2023, on its loans. This indicates that Mrcool had some debt obligations in 2023 on which it paid interest, but by 2024, the interest accrued was zero.
Additionally, the FDD mentions that Mrcool maintains a $500,000 bank line of credit with a variable interest rate based on the Term SOFR Rate. As of December 31, 2024, the interest rate was 8.375%. This line of credit is secured by all of Mrcool's business assets and expires on June 19, 2025. While the interest rate is provided, the document does not specify the exact amount of interest paid on this line of credit during 2024.
Furthermore, the document states that subsequent to the date of the financial statements, Mrcool extinguished all outstanding debt obligations through capital contributions made by its members, resulting in no outstanding debt as of the report date. This suggests that the company has taken steps to eliminate its debt, which could be a positive sign for potential franchisees as it reduces the financial risk associated with the franchisor. However, it's important to note that this occurred after the period covered by the financial statements, so it may not be fully reflected in the reported interest expenses.