In 2024, what was the amount of the goodwill impairment loss recognized by Clear Pest Pros?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
f acquisition. Goodwill is not amortized but rather is assessed at least on an annual basis for impairment.
During 2024, management determined that the carrying amount of the Company exceeded fair value, which was estimated based on the present value of expected future cash inflows. Accordingly, a goodwill impairment loss of $10,519 was recognized in 2024, which is included within operating expenses on the consolidated statement of operations. The impairment loss is attributable in part to deteriorating economic conditions impacting the Company and elimination of the TruckMount manufacturing; furthermore, strategic shifts undertaken by management to improve the overall health of the business, including ongoing efforts to reduce the overall size of its franchise network in order to resolve a h
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, the company recognized a goodwill impairment loss of $10,519 in 2024. This loss is included within operating expenses on the consolidated statement of operations.
The impairment loss is attributed to deteriorating economic conditions impacting Clear Pest Pros, as well as the elimination of the TruckMount manufacturing. Strategic shifts undertaken by management, including efforts to reduce the size of its franchise network to resolve franchisee-related matters, also adversely impacted expected future cash inflows.
Goodwill impairment is an accounting measure that reflects the difference between the recorded value of an asset (goodwill) and its fair value. A significant impairment loss can signal financial difficulties or a reassessment of the company's future prospects. For a prospective franchisee, this indicates a potential risk, as it reflects negatively on the company's financial performance and strategic direction.