What amount was reported for 1 800 Packouts' franchise agreements?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
uired assets and liabilities assumed. The excess of the purchase price over the fair value of the net assets givesrise to goodwill.
The following table sets forth the allocation of the purchase consideration to the assets acquired and liabilities assumed:
| Total consideration Rollover equity Cash acquired | $ 4,100,000 (3,000,000) (108,054) |
|---|---|
| Net cash paid | $ 991,946 |
| Cash | $ 108,054 |
| Accounts receivable | 50,956 |
| Prepaids and other assets | 634,944 |
| Operating lease right-of-use asset | 219,457 |
| Goodwill | 3,354,824 |
| Operating lease liability | (219,457) |
| Other | (48,778) |
| liabilities | |
| assumed | |
| Total purchase price | $ 4,100,000 |
j. Legal Settlement
During 2024,theCompany entered into a settlementagreementfor claimsmade underthe indemnity clause ofthe purchase agreement for the 2022 acquisition agreement of 1-800 Packouts, LLC (Packouts). The Company claimed they incurred losses due to alleged breaches of franchise-related representations and warranties by the former owner of Packouts and member of the Company. In March 2024, both parties enter
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for 1 800 Packouts does not explicitly state a specific dollar amount received from franchise agreements. However, it does detail a legal settlement that impacts the company's financials.
Specifically, in 2024, 1 800 Packouts entered into a settlement agreement related to claims made under the indemnity clause of the purchase agreement from the 2022 acquisition of 1-800 Packouts, LLC. The company claimed losses due to alleged breaches of franchise-related representations and warranties by the former owner. The settlement resulted in 1 800 Packouts receiving a total of $10,000,000.
The settlement terms involved the company repurchasing the former owner's membership interest for $4,230,000, which reduced the legal settlement receivable. The remaining settlement was to be paid in cash, with $4,950,000 received by the end of 2024, and the remaining $820,000 due in September 2025. The company has determined that this settlement amount would be treated as a reduction in the related purchase price and the acquired assets, due to its relation to the acquisition of Packouts.