How much was the amortization of goodwill and intangible assets for 1 800 Packouts in 2022?

According to 1 800 Packouts's 2025 Franchise Disclosure Document, the amortization expense resulting from goodwill and intangible assets was $10,568,470 for the year ended December 31, 2022. Amortization is the process of writing off the cost of an intangible asset over its useful life. Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business acquisition. Intangible assets are non-physical assets such as patents, trademarks, and franchise agreements.

For a prospective 1 800 Packouts franchisee, this figure indicates the scale of intangible assets 1 800 Packouts holds and how these assets are being accounted for. High amortization expenses can impact the company's net income, which is a factor to consider when evaluating the financial health of the franchisor. It is important to note that amortization is a non-cash expense, meaning it does not directly affect the company's cash flow.

The 2025 FDD also states that the company's trade names were valued using a relief from royalty discounted cash flows method. Franchise agreements were valued using an excess of earnings discounted cash flows method. The estimated useful lives of trade names is 15 years, franchise agreements is 13 to 15 years, and goodwill is 10 years.

Understanding the amortization of goodwill and intangible assets helps a potential franchisee assess the financial strategies and asset management practices of 1 800 Packouts. Reviewing these figures in conjunction with other financial statements and consulting with a financial advisor is advisable for making an informed investment decision.