What was the gain on sale of unconsolidated subsidiary for 1 800 Packouts in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
Accrued expenses | | 2,643,685 | | 336,864 | | Current portion of contract liabilities | | 1,960,914 | | 297,574 | | Current portion of operating lease liabilities | | 154,246 | | - | | Current portion of long-term debt | | 491,176 | | 55,314 | | Total current liabilities | | 5,852,729 | | 1,023,362 | | Contract liabilities, net of current portion | | 13,714,594 | | 1,418,461 | | Operating lease liabilities, net of current portion | | 1,031,261 | | - | | Long-term debt, net of current portion and debt issuance costs | | 46,381,407 | | 27,130,136 | | Deferred income taxes | | 5,083,150 | | 6,352,331 | | Total liabilities | | 72,063,141 | | 35,924,290 | | Commitments and contingencies | | | | | | Members' equity | _ | 66,275,695 | | 41,408,385 | | Total liabilities and members' equity | $ | 138,338,836 | $ | 77,332,675 |
| Revenues | $ | 26,026,524 | $ | 7,457,362 |
|---|---|---|---|---|
| Cost of revenues | _ | 5,463,228 | 2,490,615 | |
| Gross profit | _ | 20,563,296 | 4,966,747 | |
| Operating expenses: | ||||
| Selling, general and administrative | 18,837,743 | 8,259,143 | ||
| Depreciation and amortization | 10,597,574 | 2,548,873 | ||
| Total operating expenses | 29,435,317 | 10,808,016 | ||
| Loss from operations | _ | (8,872,021) | (5,841,269) | |
| Other income (expense): | ||||
| Interest 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 |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the company recognized a gain on the sale of an unconsolidated subsidiary of $1,025,637 during the year ended December 31, 2022. This gain is specifically related to the sale of equity interests in Joe Homebuyer Franchising, LLC. The sale was completed on March 9, 2022, with the equity interests being sold to the existing equity partner for $1,623,174.
For a prospective franchisee, this information provides insight into 1 800 Packouts's financial activities and its dealings with subsidiary entities. While the gain on sale itself might not directly impact day-to-day franchise operations, it reflects the company's broader financial strategies and its ability to manage and divest investments. Understanding these aspects can help a franchisee assess the financial health and strategic direction of 1 800 Packouts.
It's important to note that gains from such sales are non-recurring items and may not be indicative of ongoing operational profitability. However, they can provide a boost to the company's financial position in a particular year. Franchisees should consider this information in the context of 1 800 Packouts's overall financial performance and consult with financial advisors to understand the implications fully.