How did the sale of C12 Group Atlanta in 2023 affect goodwill?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Depreciation is provided at amounts calculated to amortize the cost of the assets over their estimated useful economic lives using straight line, generally with lives ranging from three to seven years.
Goodwill: Goodwill represents the cost of assets acquired in excess of fair value. Goodwill is amortized over a 10 year period. Amortization is expected to be $11,995 annually through 2031. Accumulate
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the sale of C12 Atlanta in 2023 resulted in a write-off of goodwill. Specifically, $80,862 in goodwill related to the subsidiary was written off. This adjustment reflects the removal of the C12 Atlanta's goodwill from C12 Group's balance sheet following the sale. Goodwill, in general, represents the cost of assets acquired that exceeds their fair value.
Prior to its sale, C12 Atlanta was a wholly-owned subsidiary of C12 Group, acquired in March 2017. The write-off indicates that the recorded goodwill associated with C12 Atlanta was no longer applicable after the sale. Goodwill is typically amortized over a period, and in C12 Group's case, it's amortized over 10 years. The annual amortization expense was expected to be $11,995 through 2031.
For a prospective franchisee, this information provides insight into how C12 Group manages its assets and accounts for acquisitions and divestitures. The write-off of goodwill is a standard accounting practice when a subsidiary is sold, and it doesn't necessarily reflect negatively on the overall financial health of C12 Group. However, it's useful to understand how such transactions impact the company's financial statements.