How were the asset acquisitions funded by Benjamin Franklin Plumbing in 2023 and 2022?
Benjamin_Franklin_Plumbing Franchise · 2025 FDDAnswer from 2025 FDD Document
e assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill.
The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as follows:
Assets acquired
| Current assets | $ 5,038 |
|---|---|
| Operating lease right-of-use assets | 175 |
| Property and equipment | 276 |
| Goodwill | 25,963 |
| Intangible assets and other assets (1) | 17,113 |
| Deferred tax assets | 231 |
| Assets acquired | 48,796 |
| Deferred revenue | (2,210) |
| Operating lease liabilities | (175) |
| Other liabilities assumed | (855) |
| Purchase Price | $ 45,556 |
(1) Identifiable intangible assets acquired include referral relationships, trademarks and non-competition agreements which will be amortized on a straight-line basis over their preliminary useful lives of 15 years, 25 years and 3 years, respectively.
Woofie's
On January 21, 2022, the Company entered into a purchase and sale agreement to acquire 100% of the outstanding equity interests of Woofie's, LLC and its subsidiaries Woofie's Mobile Pet Spa, LLC and Woofie's Pet Venture, LLC for a purchase price of $5,043. Woofie's is a professional pet care franchise company that provides pet sitting, training, walking as well as mobile pet spa services and was acquired to allow for the expansion of the Company's presence within its home services franchising platform. The acquisition was funded with rollover equity of $1,040 and cash held by the Company. Goodwill largely consists of strategic and synergistic opportunities resulting from combining Woofie's with the Company's existing businesses. No goodwill related to this acquisition is expected to be deductible for income tax purposes.
As a result of the transaction, the Company incurred and expensed transaction costs of $248, which are included in transaction costs on the consolidated statements of comprehensive loss.
The Company accounted for the acquisition as a business combination pursuant to ASC 805. In accordance with ASC 805, fair values are assigned to tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date based on the information that was available as of the acquisition date. During the year ended December 31, 2023, there were no material changes to the purchase price allocation for the Woofie's Acquisition.
The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill.
The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as follows:
| Current assets | $ 514 |
|---|---|
| Operating lease right-of-use assets | 989 |
| Property and equipment | 328 |
| Goodwill | 1,942 |
| Intangible assets and other assets (1) | 2,423 |
| Assets acquired | 6,196 |
| Operating lease liabilities | (989) |
| Other liabilities assumed | (164) |
| Purchase Price | $ 5,043 |
(1) Identifiable intangible assets acquired include customer relationships, trademarks and franchise relationships which will be amortized on a straight-line basis over their preliminary useful lives of 4 years, 25 years and 15 years, respectively.
Color World
On January 10, 2022, the Company entered into a purchase and sale agreement to acquire 100% of the assets of Color World Franchise Systems, LLC, and Color World Housepainting Inc. for a purchase price of $4,386. Color World is a paint service franchising company that has been acquired to allow for the expansion of the Company's presence within its home services franchising platform. The acquisition was funded with cash held by the Company. Goodwill largely consists of strategic and synergistic opportunities resulting from combining Color World with the Company's existing businesses. Goodwill related to this acquisition is expected to be deductible for income tax purposes.
As a result of the transaction, the Company incurred and expensed transaction costs of $197, which are included in transaction costs on the consolidated statements of comprehensive loss.
The Company accounted for the acquisition as a business combination pursuant to ASC 805. In accordance with ASC 805, fair values are assigned to tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date based on the information that was available as of the acquisition date. During the year ended December 31, 2023, there were no material changes to the purchase price allocation for the Color World Acquisition.
The Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill.
Source: Item 22 — CONTRACTS (FDD pages 87–88)
What This Means (2025 FDD)
According to the 2025 FDD, Benjamin Franklin Plumbing's parent company made several acquisitions in 2022. These acquisitions were funded through a combination of methods including rollover equity, cash, and borrowings.
Specifically, the acquisition of Woofie's in January 2022 for $5,043 was funded with $1,040 in rollover equity and cash held by the company. The purchase of Junkluggers in December 2022, for $79,202 was primarily funded with $16,000 in rollover equity and cash held by the company. DRYmedic was acquired in November 2022 for $45,556, funded by $18,984 in rollover equity and borrowings from the company's 2022 A-1 loan.
It is important to note that while these acquisitions occurred in 2022, the FDD states that there were no material changes to the purchase price allocations for these acquisitions during the year ended December 31, 2023. This indicates that the funding structures remained consistent throughout 2023. For a prospective Benjamin Franklin Plumbing franchisee, this demonstrates the parent company's investment strategy and its ability to leverage different funding sources to expand its portfolio of home service franchises.