What was the reported value of Batteries Plus Bulbs' goodwill, net, in 2023?
Batteries_Plus_Bulbs Franchise · 2025 FDDAnswer from 2025 FDD Document
subject to the achievement of specific operational targets by the repurchased stores, subsequent to the acquisition. If achieved, $600 of the earnout liability will be paid in 2025 and $400 will be paid in 2026. The contingent earnout liabilities are recorded with the notes payablestore repurchase on the consolidated balance sheets.
During 2023, Batteries Plus acquired the operating assets of four franchised stores using available cash on-hand. Batteries Plus now op
Source: Item 21 — Financial Statements (FDD pages 79–80)
What This Means (2025 FDD)
According to Batteries Plus Bulbs' 2025 Franchise Disclosure Document, during 2023, Batteries Plus Bulbs acquired the operating assets of four franchised stores using available cash on-hand. The allocation of the $1,991,000 purchase price was based on the fair value of the assets acquired and liabilities assumed. Of that purchase price, $1,423,000 was allocated to goodwill.
Goodwill, in this context, represents the intangible assets acquired above the net identifiable assets. This can include brand reputation, customer relationships, and other factors that contribute to the value of the acquired businesses. For a prospective franchisee, this indicates that Batteries Plus Bulbs is actively acquiring existing franchise locations, potentially to improve performance or consolidate operations.
The allocation of a significant portion of the purchase price to goodwill suggests that Batteries Plus Bulbs places a high value on the intangible assets of the acquired stores. This could be a positive sign, indicating a strong brand and established customer base. However, it's important to note that goodwill is an intangible asset and its value can be subjective and subject to impairment if the acquired businesses do not perform as expected.