What was the balance of goodwill for Checkersrallys at June 17, 2023?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
| throu I | e 17, 2023 gh January l, 2024 (ccessor) | Weighted Average Useful Life (Years) | |
|---|---|---|---|
| Balance at June 17, 2023 | S | 31,766 | 10 |
| Amortization | (1,729) | ||
| Balance at January 1, 2024 | S | 30,037 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the balance of goodwill at June 17, 2023, was $31,766 (in thousands). Goodwill, in accounting terms, represents the intangible assets acquired in a business combination that are not separately identifiable, such as brand reputation or customer relationships.
The FDD also indicates that this goodwill is being amortized over a weighted average useful life of 10 years. Amortization is the systematic reduction of the carrying value of an intangible asset over its useful life. For Checkersrallys, this means the initial goodwill of $31,766 will be reduced annually, with $1,729 amortized by January 1, 2024, bringing the balance down to $30,037.
For a prospective Checkersrallys franchisee, understanding goodwill and its amortization is important for assessing the financial health and stability of the franchise system. Goodwill often arises from acquisitions or mergers, reflecting the premium paid over the fair value of identifiable net assets. The amortization expense, while non-cash, impacts the reported earnings of Checkersrallys and could affect key financial ratios and metrics that franchisees use to evaluate the franchise's performance.