What was the total carrying value of debt for Precision Door Service in 2023?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
nce with maximum leverage ratio levels. As of December 31, 2024 and 2023, the Issuer was in compliance with all debt-service coverage covenants.
The Company's long-term debt and trade notes receivable bear interest at market rates. Thus, management believes their carrying amounts approximate fair value.
Debt consists of the following as of December 31:
| 2024 | 2023 | |
|---|---|---|
| Series 2021-1 Senior Notes | $ 772,000 $ | 780,000 |
| Series 2022-1 Senior Notes | 398,725 | 402,825 |
| Series 2023-1 Senior Notes | 270,188 | 272,938 |
| 2021 VFN Fa |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the total carrying value of debt for the company in 2023 was $1,480,763. After deducting deferred financing costs of $18,919, the total net debt was $1,461,844. Further subtracting the current portion of $10,488, the long-term debt amounted to $1,451,356.
This figure represents the total amount of debt obligations that Precision Door Service had on its books at the end of 2023. This includes various senior notes and VFN (Variable Funding Note) facilities. For a prospective franchisee, understanding the debt structure of the franchisor is crucial because it can indicate the financial stability and leverage of the company. A high debt level might suggest higher financial risk, while a lower level could indicate a more stable financial position.
It's important to note that these figures are based on the company's financial statements and are subject to change. Additionally, the notes to the financial statements, as referenced in the document, provide further details on the nature and terms of the debt, including interest rates, maturity dates, and any covenants or restrictions associated with the debt agreements. A potential franchisee should review these notes carefully to fully understand the implications of the franchisor's debt on the overall financial health of Precision Door Service.
Prospective franchisees should consider consulting with a financial advisor to assess the implications of Precision Door Service's debt on their investment. Understanding the franchisor's financial obligations can help franchisees make informed decisions and evaluate the potential risks and rewards of investing in the franchise system.