What was the value of 1 800 Packouts' goodwill, net, in 2023?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
opinion on the effectiveness of the Company'sinternal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
April 23, 2025
| (1) | 2024 | 2023 | |
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| Cash | $ | 3,690,691 | $ 1,455,349 |
| Restricted cash | - | 840,143 | |
| Accounts receivable, net of an allowance for credit losses | |||
| of $74,296 and $105,953, respectively | 6,102,611 | 3,565,178 | |
| Other | 820,000 | - | |
| current | |||
| receivable | |||
| Current | 1,797,429 | 1,382,859 | |
| portion | |||
| of | |||
| contract | |||
| assets | |||
| Prepaid and other current assets | 1,803,912 | 1,537,556 | |
| Total current assets | 14,214,643 | 8,781,085 | |
| Goodwill, net | 52,556,496 | 66,184,756 | |
| Intangible assets, net | 45,678,810 | 50,358,496 | |
| Contract assets, net of current portion | 13,317,603 | 10,981,453 | |
| Operating lease right-of-use assets | 1,603,081 | 1,272,436 | |
| Other assets | 2,206,748 | 828,551 | |
| Total assets | $ | 129,577,381 | $ 138,406,777 |
| Liabilities and Members' Equity | |||
| Current liabilities: |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, the value of goodwill, net, was $66,184,756 in 2023. This figure represents the intangible asset arising from the acquisition of 1 800 Packouts, reflecting the excess of the purchase price over the fair value of identifiable net assets acquired. Goodwill is not amortized but is tested for impairment at least annually.
For a prospective franchisee, understanding the goodwill value can provide insight into the financial health and acquisition history of 1 800 Packouts. A high goodwill value may indicate that the company has made significant investments in acquiring other businesses or has a strong brand reputation. However, it's crucial to note that goodwill is subject to impairment, which could negatively impact the company's financial statements if the value is deemed to have declined.
The FDD also provides information on other intangible assets, such as trade names and franchise agreements, which, along with goodwill, contribute to the overall value of the 1 800 Packouts brand. Reviewing these figures in conjunction with the company's financial statements can offer a more comprehensive understanding of its financial position. Franchisees should monitor these values over time to assess the stability and growth potential of the 1 800 Packouts franchise system.