What does goodwill represent for Better Homes And Gardens Real Estate?
Better_Homes_And_Gardens_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
| As of December 31, 2024 | As of December 31, 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||
| Amortizable—Franchise agreements (a) | $ | 2,010 | $ | 1,189 | $ | 821 | $ | 2,010 | $ | 1,123 | $ | 887 |
| Indefinite life—Trademarks (b) | $ | 584 | $ | 584 | $ | 586 | $ | 586 | ||||
| Other Intangibles | ||||||||||||
| Amortizable—License agreements (c) | $ | 45 | $ | 17 | $ | 28 | $ | 45 | $ | 16 | $ | 29 |
| Amortizable—Customer relationships (d) | 449 | 401 | 48 | 454 | 385 | 69 | ||||||
| Indefinite life—Title plant shares (e) | 30 | 30 | 28 | 28 | ||||||||
| Amortizable—Other (f) | 4 | 4 | — | 7 | 6 | 1 | ||||||
| Total Other Intangibles | $ | 528 | $ | 422 | $ | 106 | $ | 534 | $ | 407 | $ | 127 |
(a) Generally amortized over a period of 30 years.
(b) Includes impairment charges which reduced goodwill by $25 million during 2023, $394 million during 2022, $540 million during 2020, $253 million during 2019, $1,279 million during
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 75–76)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, goodwill for Better Homes And Gardens Real Estate primarily relates to real estate franchise, title, and relocation trademarks. These trademarks are expected to generate future cash flows for an indefinite period. The document indicates that the year ended December 31, 2024, includes a $2 million reduction for the sale of a business.
Goodwill, in accounting terms, represents the intangible assets of a business, such as brand reputation and customer relationships, that contribute to its value. For Better Homes And Gardens Real Estate, the goodwill associated with its trademarks suggests that the brand's name and reputation in the real estate, title, and relocation sectors are significant assets.
The FDD also mentions impairment charges that reduced goodwill in previous years: $25 million during 2023, $394 million during 2022, $540 million during 2020, $253 million during 2019, $1,279 million during 2008 and $507 million during 2007. These charges indicate that the company has, at times, reassessed the value of its goodwill and determined that it was worth less than previously estimated. This can happen due to various factors, such as changes in market conditions or the performance of the business.
Prospective franchisees should understand that while goodwill is an asset, its value can fluctuate and is subject to impairment. The Better Homes And Gardens Real Estate brand name carries significant weight in the real estate industry. The consistent payment of licensing fees to Meredith Operations Corporation for the Better Homes and Gardens® Real Estate brand, which was approximately $4 million in 2024, further emphasizes the importance of the brand's name and associated goodwill.