What was the amortization of operating lease right-of-use asset for 1 800 Packouts in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
terest expense | | (3,821,499) | | (647,029) | | Earnings from unconsolidated subsidiary | | - | | 77,537 | | Gain on sale of unconsolidated subsidiary | | 1,025,637 | | - | | Other income (expense) | _ | (51,463) | | (112,956) | | Total other expense, net | _ | (2,847,325) | | (682,448) | | Loss before income taxes | | (11,719,346) | | (6,523,717) | | Income tax benefit | _ | 1,280,676 | | 374,421 | | Net loss | $ | (10,438,670) | s | (6,149,296) |
| Balance as of April 9, 2021 (inception) | $ | |
|---|---|---|
| Contributions | 47,557,681 | |
| Net loss | (6,149,296) | |
| Balance as of December 31, 2021 | 41,408,385 | |
| Contributions | 35,555,980 | |
| Distributions | (250,000) | |
| Net loss | _ | (10,438,670) |
| Balance as of December 31, 2022 | Ś | 66,275,695 |
| For the year ded December 31, 2022 | (in | r the period from April 9, 2021 ception) through cember 31, 2021 | ||
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net loss | $ | (10,438,670) | $ | (6,149,296) |
| Adjustments to reconcile net loss to net cash used in | ||||
| operating activities: | ||||
| Amortization of goodwill and intangible assets | 10,568,470 | 2,543,033 | ||
| Depreciation of fixed assets | 29,104 | 5,840 | ||
| Amortization of deferred financing costs |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the amortization of operating lease right-of-use asset for the year ended December 31, 2022, was $108,253. This figure reflects the expense recognized during that year related to the use of leased assets, which 1 800 Packouts utilizes in its operations.
For a prospective 1 800 Packouts franchisee, understanding this amortization expense is crucial for assessing the overall financial health and profitability of the franchise. Lease amortization represents the gradual expensing of the cost of right-of-use assets over their useful life. This accounting practice aligns with the recognition of lease liabilities and right-of-use assets on the balance sheet, as mandated by accounting standards.
The inclusion of this figure in the cash flow statement provides transparency into the non-cash expenses that affect 1 800 Packouts's net income. Reviewing this data over multiple years, as presented in the FDD, can reveal trends in the company's leasing activities and the associated costs. This information can be valuable for a potential franchisee in projecting their own operating expenses and understanding the financial obligations related to leasing property or equipment.
It's also important to note that on January 1, 2022, 1 800 Packouts recognized $1,175,322 in operating lease liabilities and right-of-use (ROU) assets. This recognition stems from the adoption of new accounting standards related to leases, indicating a significant impact of lease accounting on the company's financial statements.