What subsidiary entity did 1 800 Packouts acquire on January 31, 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
ased on the difference between financial statement and tax bases of assets and liabilities using estimated tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized only if it is more likely than not that the asset will be realized in future years.
Reclassifications
Certain amounts in the 2021 consolidated financial statements have been reclassified to conform with the current year, presentation.
Subsequent Events
Management has evaluated events and transactions for potential recognition or disclosure through April 30, 2023, which is the day the consolidated financial statements were available to be
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, on January 31, 2022, the company acquired 100% of the equity interests in 1-800-Packouts, LLC (Packouts). The securities purchase agreement included payment of rollover interest of $4,230,000, where the former owner was granted an ownership interest in the company. The agreement also stipulated two delayed cash payments of $1,000,000 each, to be paid in June 2023 and December 2023, which were valued at a present value of $1,795,418 as of the acquisition date. This amount was accrued and included in the 2022 issued financials.
This acquisition is significant for prospective franchisees as it demonstrates 1 800 Packouts' growth strategy through acquisitions. Understanding the financial implications of these acquisitions, such as the rollover interest and delayed cash payments, can provide insights into the company's financial management and stability. Additionally, the fact that the company made a legal settlement related to the acquisition of Packouts indicates that there may be risks associated with the representations and warranties made by the former owner of Packouts.
It is important for potential franchisees to be aware of these details, as they can impact the overall health and stability of the franchise system. Further investigation into the nature of the legal settlement and the reasons behind it may be warranted to fully assess the risks and opportunities associated with investing in a 1 800 Packouts franchise. This information is typically found in the financial statements and related notes within the FDD, which should be carefully reviewed by any prospective franchisee.