What was the total purchase price for 1 800 Packouts?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
chase agreement included payment of rollover interest of $2,000,000 wherein the former owner was granted an ownership interest in the Company, which was included in the total consideration paid for the acquisition.
In relation to these acquisitions, the Company elected to early adopt Accounting Standards Update 2021-08, Business Combinations (ASU 2021-08). ASU 2021-08 allows a Company to recognize and measure contract assets and contract liabilities in accordance with ASC 606, Revenue from Contracts with Customers. Accordingly, the contract assets and contrac
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, the total purchase price for 1 800 Packouts was $24,558,417. This figure represents the estimated fair value of assets acquired and liabilities assumed during the acquisition of 100% equity interests in 1-800-Packouts, LLC. The acquisition agreement was finalized on January 31, 2022. This valuation includes various assets such as cash, accounts receivable, trade name, franchise agreements, and goodwill, as well as liabilities assumed during the transaction.
The purchase price reflects the overall investment made by the acquiring company to obtain control and ownership of the 1 800 Packouts business. It's important to note that this price incorporates not only tangible assets but also intangible assets like the trade name and franchise agreements, which contribute significantly to the brand's value. Additionally, goodwill, representing the premium paid above the fair value of identifiable net assets, constitutes a substantial portion of the total purchase price.
For a prospective franchisee, understanding the components of this purchase price can provide insights into the valuation of the 1 800 Packouts brand and its assets. While the franchisee is not directly involved in this past acquisition, it demonstrates the financial significance and perceived value of the 1 800 Packouts business model. Reviewing the types of assets included, such as trade name and franchise agreements, can highlight the key elements that contribute to the brand's overall worth and market position.
It is also important to note that during 2024, the company entered into a settlement agreement for claims made under the indemnity clause of the purchase agreement for the 2022 acquisition agreement of 1-800 Packouts, LLC. Under the terms of the agreement, the Company received a total settlement of $10,000,000. The company determined that since this settlement was related to the acquisition of Packouts, the settlement of amount would be treated as a reduction in the related purchase price and the acquired assets.