What was the amount of goodwill recognized through store acquisitions for Beef O Bradys in 2023?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
| | 2024 | 2023 | | |---|---|---|---| | Beef 'O' Brady's Fund | | | | | Franchise marketing and advertising fees | $ 1 ,119,000 | | $ 1,096,000 | | Salaries and overhead charges | 25,000 | 25,000 | | | Brass Tap Fund | | | | | Franchise marketing and advertising fees | 21,000 | 27,000 | | | Salaries and overhead charges | 25,000 | 25,000 | | The changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023 were as follows:
| Balance, December 31, 2022 | $ 15,162,3
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the goodwill recognized through store acquisitions in 2023 was $744,392. This figure reflects the excess of the purchase price over the fair value of assets when Beef O Bradys acquired restaurants from existing franchisees. Goodwill, in accounting terms, represents the intangible assets, such as brand reputation and customer relationships, that are not separately identifiable but contribute to the value of the acquired business.
For a potential Beef O Bradys franchisee, understanding goodwill is crucial because it reflects the financial health and acquisition strategy of the company. A significant amount of goodwill might indicate that Beef O Bradys is actively acquiring existing locations, potentially to improve performance or expand its corporate store portfolio. This could present opportunities for franchisees looking to sell their existing businesses back to the company.
However, it's also important to note that goodwill is an intangible asset that is subject to impairment. If the value of the acquired restaurants declines, Beef O Bradys may have to write down the goodwill, which could negatively impact its financial statements. Therefore, while goodwill from store acquisitions can be a positive sign, prospective franchisees should also consider the long-term sustainability and performance of these acquired locations. They should also inquire about the criteria and process Beef O Bradys uses to determine the fair value of acquired assets and the potential for goodwill impairment.