What was the total company goodwill for the Budget franchise as of January 1, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
intangible assets at December 31, 2024, we expect amortization expense of approximately $22 million for 2025, $21 million for 2026, $15 million for 2027, $9 million for 2028 and $7 million for 2029 excluding effects of currency exchange rates.
The carrying amounts of goodwill and related changes are as follows:
| | Americas | 5 | International | Total Company | |------------------------------------------------------
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the total company goodwill as of January 1, 2023, was $3,188 million. Goodwill represents the intangible assets acquired in a business combination that are not separately identifiable. It is the excess of the purchase price over the fair value of the identifiable net assets acquired.
For a prospective Budget franchisee, understanding the goodwill figure provides insight into the overall financial health and acquisition strategy of the company. A high goodwill figure might indicate that Budget has made significant acquisitions, potentially expanding its market presence and brand recognition. However, it's also important to note that goodwill is subject to impairment testing, and a significant impairment could negatively impact the company's financial results.
The FDD also lists accumulated impairment losses as of January 1, 2023, which totaled $2,118 million. Impairment losses represent the reduction in the carrying value of goodwill when its fair value is less than its carrying amount. The net goodwill after accounting for accumulated impairment losses as of January 1, 2023, is $1,070 million. This figure is calculated by subtracting the accumulated impairment losses ($2,118 million) from the initial goodwill ($3,188 million).
It is important for potential franchisees to consider these figures in the context of Budget's overall financial performance and industry trends. Consulting with a financial advisor to interpret these figures and their potential impact on the franchise investment is advisable.