What was the reported amount for 'Acquired franchise agreements, net' for Boulder Designs in 2024?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
ent assets by $951,771 and $824,556, respectively. Management of the Company has taken initiative to efficiently manage the business, as well as increase liquidity and financial flexibility in order to mitigate the negative operating results. The Company has implemented certain cost reduction plans and is analyzing its sources for sales leads to take a more strategic ap
Source: Item 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the value of acquired franchise agreements was $563,824 as of December 31, 2024. These agreements represent franchise rights that Boulder Designs had previously sold but later repurchased due to various circumstances, with the intention of reselling them.
It's important to note that Boulder Designs recognized an impairment loss of $28,000 on these acquired franchise agreements during 2024. An impairment loss indicates a reduction in the recoverable amount of an asset, meaning that Boulder Designs determined the value of these franchise agreements had declined.
For a prospective franchisee, this information provides insight into Boulder Designs's business practices regarding franchise resales and how they account for these transactions. The consistent impairment losses over the past three years (2022-2024) might suggest a trend in the devaluation of repurchased franchise rights, which could be due to market conditions, franchisee performance issues, or other factors. A potential franchisee should inquire about the reasons for these repurchases and the company's strategy for reselling these franchises.